Oral Answers to Questions

WORK AND PENSIONS

The Secretary of State was asked—

State Pension

Greg Mulholland: What plans he has to increase the level of and entitlement to the basic state pension.

John Hutton: We are currently considering all the recommendations of the second report of the Pensions Commission and will be publishing a White Paper on pension reform by the end of the month. The action that we have taken since 1997 has seen pensioner income rise across the board with the poorest pensioners benefiting the most.

Greg Mulholland: As the current Prime Minister seems to agree with the broad consensus in the Turner report, including its concerns about means-testing and the disincentive that that provides to saving, should we be worried that the Chancellor appears not to agree? Will we see a change of direction, a rejection of the Turner commission proposals and more proposals for means-testing some time in the next few weeks?

John Hutton: The hon. Gentleman will have to wait and contain himself for the next couple of weeks, and all will be clear about the way forward. The Pensions Commission has identified several problems in relation to the current system that I agree need to be tackled so that we can we reach a consensus on a long-term sustainable pension settlement that will benefit not just today's pensioners but those in future generations.

Sarah McCarthy-Fry: The population is increasingly ageing, so the level of state pension is pertinent to many pensioners in my constituency, and the Department for Work and Pensions is currently undertaking a consultation about it. However, one of my constituents has sent me a copy of an advert asking for information, and the only way of responding to the consultation is via a website. Given that many pensioners do not have internet access, does my right hon. Friend agree that that is discriminatory? What plans are in place to increase uptake on that consultation?

John Hutton: We certainly have not tried to discriminate against anyone or any section of society in conducting the extensive debate on the way forward in pensions reform. A number of undertakings and agreements exist with public libraries across the United Kingdom that will allow people who do not have internet access to take part in consultations. I assure my hon. Friend and the House that we have made great efforts to ensure that the consultation is as wide-ranging as possible, and we have had a positive response to it.

Peter Bottomley: Are the Government prepared to consider the 500,000 state pensioners abroad, half of whom do not get inflationary increases while the other half do? Why is it necessary to say that one does not get an increase in Vancouver but one does in Seattle, and that one does get an increase in Malibu but not in Melbourne? That seems incomprehensible to most people.

John Hutton: We intend to continue the arrangements of successive Governments in relation to how pensioners living abroad receive their pensions. The arguments that we would put forward in favour of continuing those arrangements are exactly the same as those that the previous Conservative Government put forward.

Lindsay Hoyle: Obviously the Government have done a lot to help pensioners, and we know that the poorest of pensioners have had great support. Surely, however, the time has now come to consider the system again, as a third of pensioners who are entitled to pension credit do not take it up. Why not make the payment universal, and use the tax system to claw it back from those who are too wealthy?

John Hutton: I agree with a lot of what my hon. Friend has said, and we certainly must tackle the problem of the growth and extension of means-testing in the pension system. Our proposals in the White Paper will address that. Pension credit in particular has been a huge success in tackling pensioner poverty. It was opposed, I am afraid, by the Liberal Democrats as well as the Conservatives, so there is no change there. My hon. Friend will have to wait until the White Paper is published, and I am sure that he will be pleased with the outcome. In relation to tax matters, those are very much the prerogative of my right hon. Friend the Chancellor, and I do not intend to intrude into that territory.

Michael Weir: The Minister will know that there is a growing consensus in the country for a better pension provision by means of a citizen's pension. Why have the Government seemingly set their face so resolutely against even considering reform of the current system of pension tax relief, which could release much of the money required for such a citizen's pension?

John Hutton: As I said, tax issues in relation to pensioner income are a matter for my right hon. Friend the Chancellor, not for the Department for Work and Pensions. I am sure that there will be a lively debate about that. In relation to the concept of a citizen's pension, for which the eligibility rules relate to residency rather than contributions, I have made clear that my strong preference is for the continuation of the contributory principle. The principle of something for something has been at the heart of state pension policy in this country for nearly 100 years; it was started by the great David Lloyd George when he was Chancellor of the Exchequer and continued in subsequent years. The challenge now is how to make the contributory principle much fairer to women and carers. The White Paper will certainly take up that challenge.

David Taylor: One of the meanest acts of the previous Government was to break the link between pensions and pay in the economy. As a result, single pensioners lost £33 a week before the 1997 election, and have lost £19.50 since. Is the Secretary of State aware that, three of four days ago, one of our colleagues on the Treasury Committee asked Lord Turner,
	"after your proposals, we would still have one of the meanest pension systems in the OECD?"
	"Yes," replied Lord Turner:
	"We would still have a very basic system."
	His set of proposals is not exactly ambitious or costly, is it?

John Hutton: I followed the proceedings in the Treasury Committee closely, as my hon. Friend will know. Affordability, however, is a fundamental issue that must be addressed by not just the present Government but successive Governments when it comes to long-term pensions reform. It would be wrong to assume that there are no affordability issues; Turner himself recognised that in his report.
	I agree with my hon. Friend on one point, however. I believe that if we can find the basis for long-term consensus on pensions reform—in my view, the Turner analysis is broadly right—we shall have an enormous prize within our grasp, and I hope that there will be consensus on the proposals that we shall present shortly.

David Laws: I congratulate the Secretary of State on surviving the bloodbath of last week's reshuffle. We are all very relieved not to have a fifth Secretary of State within a period of just20 months. I also welcome the right hon. Gentleman's new ministerial colleagues.
	The Secretary of State will recall that, a few weeks ago, the Chancellor said that there was 90 to 95 per cent. agreement on the Turner proposals. That is welcome, but can the Secretary of State say more about where the remaining disagreement lies? In particular, can he tell us whether the Treasury has now accepted Lord Turner's argument about a later state pension age, which the Secretary of State has already indicated that he supports?

John Hutton: I am grateful—I suppose—for the hon. Gentleman's support for my continuation in this role. Perhaps he would like to put it in writing. That would be very welcome; indeed, it would be the first time anyone had written to me about anything nice.
	With great respect to the hon. Gentleman, I must tell him that he will have to wait until the White Paper is published. There is, however, a large measure of agreement across Government on the way forward for pensions reform, and as I keep saying, I hope and trust that when we produce our proposals in the near future, they will command widespread support.

Philip Hammond: On pensions reform, is the Secretary of State still—in his own words on 31 January—
	"looking for the widest possible cross-party consensus"?—[ Official Report, 31 January 2006; Vol. 442, c. 246.]

John Hutton: The hon. Gentleman cannot have been listening to what I have said this morning—or this afternoon, or whatever time it is. I think I have made clear on several occasions that that is my continuing ambition. I suspect that the hon. Gentleman's question was prearranged and he was not able to adjust it, but it is of course my intention to maintain as wide a consensus as possible.

Philip Hammond: We have now established that the Secretary of State does not know what time it is, but I am glad to hear that he is still committed to the search for cross-party consensus. Pensions policy is a long-term issue, and it is essential, in the national interest, for us to try to forge that consensus. Conservative Members have looked forward to playing their part in that, because, as the Secretary of State has said, pensions policy must be sustainable over time and changes of Government.
	With the pensions White Paper just a couple of weeks away, can the Secretary of State tell us why his search for that cross-party consensus has not led him to seek a single meeting with the Opposition parties on this subject, to attempt to establish the extent of agreement on the problems involved in pensions reform, or indeed to explore the scope for resolution of issues on which there is no agreement? In fact, can he tell us what exactly he has done to establish a cross-party consensus on this matter?

John Hutton: As we all know, a week is a long time in politics. The hon. Gentleman should not assume that there will be no such meetings, and I look forward to having a meeting with him to discuss all these matters. If memory serves me right, I have sought to involve him and his party in some of the meetings that we have arranged, and I believe that he attended some of them. I remember him putting some points to the panel of speakers. I hope that he is not reading too much into this. We look forward very much to having discussions with him, and indeed with the hon. Member for Yeovil (Mr. Laws).

Income Support (Overpayment)

Tobias Ellwood: What assessment he has made of the level of overpayment of income support; and if he will make a statement.

James Plaskitt: Our latest estimate for 2004-05 is that £550 million was overpaid in income support through a combination of fraud, customer error and official error—equivalent to 5.3 per cent. of expenditure on that benefit. That is the lowest level of overpayment recorded to date, and a substantial improvement on the inherited 1997-98 level of 9.2 per cent. It is our firm intention to reduce overpayment levels even further.

Tobias Ellwood: I am grateful for that reply, but it does not disguise the fact that our benefits system is in a mess. Constituents now regularly come to my surgeries brandishing two letters: the first is dated last year and from the Inland Revenue, stating that they deserve x amount in benefits; the second is dated this year and from the Government, who are asking for half of it back. When will the Under-Secretary get a hold of this problem and help the very people who need our support?

James Plaskitt: I hope that the hon. Gentleman is making matters clear to his constituents, because he seems to be confusing the Inland Revenue's responsibilities with those of the Department forWork and Pensions. My and the Department's responsibilities cover fraud and error in the system. I remind him that we have set ourselves some very tough targets to reduce losses through fraud and error, and we are on course to meet them. We aimed to get such losses down by 33 per cent. by March 2004; in fact, they were down by 37 per cent. Our next target is to reduce them by 50 per cent.; so far, they are down by44 per cent.

Keith Vaz: But as my hon. Friend the Under-Secretary knows, there is a difference between a mistake of law and a mistake of fact.Like the hon. Member for Bournemouth, East(Mr. Ellwood), I have constituents coming to my surgeries saying that they have received demands for their income support to be repaid because of mistakes made by officials. What guidelines do Ministers give to officials to ensure that, where a mistake is made and a demand is issued for the repayment of the whole sum, time is given for those in need of such benefits to pay them back?

James Plaskitt: My hon. Friend will of course know that there is existing social security law on this issue. Where it is clear that such overpayment is the result of an official error, we will not recover it. Where a request for recovery is made, we make it in sympathy with the individual's circumstances. The Department has no desire to cause any hardship, and arrangements can be made for repayment over time to suit the individual concerned.

Occupational Pensions

John Robertson: What assessment his Department has made of the merits of introducing compulsory contributions by employers and employees to occupational pension schemes.

John Hutton: The Pensions Commission recommended the introduction of a new low-cost national pension saving scheme with automatic enrolment and compulsory employer contributions. We are giving careful consideration to those recommendations and we will publish our White Paper by the end of the month.

John Robertson: I realise that the issue of compulsory pensions is a very difficult nettle to grasp, particularly given that the Opposition are not assisting him in this regard, but I draw his attention to an amendment to the Turner report, which suggests that a 5 per cent. contribution from each side would cover people's future needs. Is it not time seriously to look at compulsory pension contributions, for the good of those affected in years to come?

John Hutton: I agree with my hon. Friend; Lord Turner's analysis is indeed very compelling. But if we are to establish a new national pension savings scheme along the lines suggested, we have to be absolutely sure that it will be safe automatically to enrol people in it, so that they will always be better off inside it than remaining outside it and relying on means-tested support from the state. The judgment that we have to make in deciding whether to proceed with employer contributions is a finely balanced one, and we must be mindful of the impact on the labour market, and particularly on small companies. But I can assure my hon. Friend and the House that we are looking closely at this very important element of Lord Turner's proposals.

Mark Pritchard: My constituent, Mr. James Griffiths, paid into the Triplex Lloyd Components pension scheme for 25 years and expected to receive a pension of £160 per week. Unfortunately, that pension scheme has now been wound up. In the light of the proposals set out by the Secretary of State today, what assurances can he give to my constituents that there will be no more pension wind-ups?

John Hutton: Obviously we do not want to see that happen, and we put in place a range of measures in the Pensions Act 2004 to provide proper protection when it does happen. There is also a financial assistance scheme for scheme wind-ups that predate 2004 and the introduction of those measures. I do not know the details of the hon. Gentleman's constituent's problem, but if he writes to me I will look into them.

Gordon Prentice: Does my right hon. Friend feel bad about rubbishing the ombudsman's report on occupational pensions within 24 hours of its publication when she specifically requested that the Government spend at least two months mulling it over? When will he give his final considered response to Ann Abraham's report?

John Hutton: No, I do not feel bad. The Government's view is that there was no evidence for her finding of maladministration and I set out in my statement in the House the reasons why I came to that view. I will set out in greater detail the argument that underpins that essential assumption. I can certainly say that we are giving careful consideration to whether we can provide more financial assistance to people who are caught up in those situations. As my right hon. Friend the Prime Minister made clear in the House only a few weeks ago, that review has been expedited and when we publish our full response to the ombudsman's report in the next couple of weeks, I hope that those matters can all be addressed at the same time.

Graham Stuart: When pensions reforms are complete, does the Secretary of State want to see means-testing increased, reduced or kept at the same level?

John Hutton: Like his hon. Friend, the hon. Member for Runnymede and Weybridge (Mr. Hammond), the hon. Gentleman must have missed the answer that I gave a few minutes ago, when I said that we have to control the spread of means-testing in the pensions system.

Post Office Card Account

Simon Burns: What recent representations he has received on the future of the Post Office card account; and if he will make a statement.

James Plaskitt: The Post Office card account contract runs from 2003 to 2010. The card account will be funded by the Government until 2010 as always planned. Both my Department and the Post Office are now focusing on our shared contractual commitment to begin migrating customers to alternative accounts, such as the new savings account, just introduced by the Post Office. We will continue to ensure that if customers wish to access benefit payments via the post office they will be able to do so.

Simon Burns: I am slightly puzzled by that answer, given that my question was about the representations that have been received on the issue. I got no answer to that.People such as Mrs. Knight, the postmistressat Roxwell post office, who presented a petition of 500 signatures that I sent to the Minister, are extremely concerned about the decision and the impact that it will have on clients and on post offices after 1910. Will the Minister, even at this late stage, consider reviewing the decision?

James Plaskitt: The hon. Gentleman may wish to hark back to 1910, but I am interested in the future for the Post Office. We have had other representations, such as one recently from a postmaster in Plymouth who pointed out that since his customers have started migrating from POCAs to other accounts, his business has increased. He will not be the only one saying that.I have certainly received the hon. Gentleman's representation on the subject, because I have read his article in the  Westminster View, which I commend to the House. He wrote:
	"I am not arguing for the retention of the Post Office Card Account as it is"—

Simon Burns: Read on.

James Plaskitt: I am reading on. He continues:
	"We must ensure that pensioners and lone parents...can access money in a post office setting and have the whistles and bells that we demand from our current accounts readily available to them in a user friendly way."
	That is exactly what we are trying to do, in conjunction with the Post Office.

Frank Field: The Post Office card for pensioners has been the outstanding IT success for the Government. Is that why it is being abolished?

James Plaskitt: I refer my right hon. Friend to the contract that we have with the Post Office, which makes it absolutely clear that the Government funding for the account was to run until 2010 and that we are both—the Post Office and the DWP— bound by that contract to help to migrate customers to accounts that are more appropriate to them. That is what we are doing.

Danny Alexander: If the Minister had listened at all to the views of postmasters in the highlands of Scotland, or to the general public, he would know that there is massive opposition and genuine anger about the decision to end the Post Office card account. Will he tell the House how he is getting on with the Post Office in his negotiations to develop a successor account to the card account after 2010, and can he assure the House that holders of Post Office card accounts will be easily migrated to the new account with no let or hindrance, of the form that people experienced when they tried to sign up to POCAs in the first place?

James Plaskitt: I can assure the hon. Gentleman that we are having constructive discussions about that with the Post Office. I draw his attention to the comments of Alan Cook, the managing director of the Post Office, who referred to the Post Office in a recent interview as a highly trusted brand, which I think that we all accept. He went on:
	"There is a great opportunity for us"—
	the Post Office—
	"providing that we come up with high integrity, simple, good value propositions for customers that build on the trust that people have".
	The Post Office is starting to introduce new accounts, as I said earlier, and will introduce further accounts. As I have told the hon. Gentleman before, there are already up to 25 Post Office-accessible accounts to which individuals can switch and that have more services than the Post Office card account. If more customers switch to those accounts, the chances are that revenue for sub-postmasters will increase.

Russell Brown: Can my hon. Friend give the House an indication of the actual cost to the taxpayer of the use of Post Office card accounts rather than bank accounts? Can he also give an indication of the costs for the new instant saver accounts? The House was led to believe that the Post Office card account would cost significantly less than the old benefit books.

James Plaskitt: I can assure my hon. Friend that the account is less costly than the old benefit books. Indeed, the transition from benefit books to the direct payment method now in use has been very successful, with an approval rate of more than 92 or 93 per cent. in surveys. The cost to the Government of supporting the Post Office card account runs at about £200 million a year. We have undertaken to continue that support, as we said at the outset, until 2010. We need now to begin the process of migrating people to other accounts in anticipation of 2010, so that the transition is smooth and successful.

David Ruffley: Ditching the Post Office card account is causing great concern to many vulnerable people, especially in the absence of a clear announcement of what the successor account will be. According to the managing director of the Post Office, the revenue from the Post Office card account amounts to £200 million a year, which goes into a network that is desperately striving to keep sub-post offices open, so will the Minister get a grip, clear up the confusion and tell us today what account exactly will replace POCA and when he will tell us about it?

James Plaskitt: The accounts that will emerge are primarily a matter for the Post Office. If the hon. Gentleman has been following developments, he will see that the Post Office recently launched a new account and is working on others. It is not for me to say what accounts it will come up with; that is a matter for the Post Office. I remind him that the new managing director of the network, Alan Cook, whom I quotedin an earlier answer and whom I meet reasonably regularly to talk about the situation, is looking for new products that will be attractive to the customer base. As I have also said in answer to previous questions, we are anxious to ensure that all our clients who want to continue accessing their benefit from the Post Office can do so.
	I know that the hon. Gentleman likes to make as much fuss as he can and likes to whip up the concern that he was talking about, but the fact is that because of the extra support that the Government are putting into the rural network, the rate of post office closures, about which he purports to be worried, has slowed dramatically in rural areas, compared to the rate under the Conservative Government. On that issue, as on so many others, the hon. Gentleman is audible but not credible.

Pension Reform

Richard Ottaway: What discussions he has had with the Chancellor of the Exchequer on pension reform; and if he will make a statement.

James Purnell: My right hon. Friend the Secretary of State has regular discussions with the Chancellor on matters of mutual concern, and pension reform is one of those matters. We will be setting out the Government's response to the Pensions Commission's report in a White Paper by the end of the month.

Richard Ottaway: May I give a warm welcome to the Secretary of State's statement today that he seeksto control the spread of means-testing? From the Minister's discussions with the Chancellor, could he elaborate a bit on how that will be achieved?

James Purnell: Of course the immediate problem that we had to deal with was the pensioner poverty that we inherited from the Conservative Government, and the current policy has been extremely successful in that regard. It has taken 2 million people out of absolute poverty—we make absolutely no apology for that—but the Turner commission has very helpfully proposed a comprehensive case for future reform, which is exactly what we will bring forward proposals on by the end of the month.

Terry Rooney: My hon. Friend will know that 4.5 million people do not join the occupational pension schemes provided by their employers. Does he envisage that any legislative change might be necessary to encourage those people to take up the offer that is already on the table?

James Purnell: Of course that is one of the key parts of Lord Turner's proposals. He rightly identifies the fact that people outside those schemes suffer from a problem of inertia, which is what his proposals are intended to address. He does, of course, make proposals on occupational pension schemes, which are often the most attractive ones that people have to choose from, and it is important that we continue to support them.

James Clappison: During the last Conservative Government, when he was the shadow Chancellor of the Exchequer, the present Chancellor of the Exchequer promised the elimination of means-testing. Can the hon. Gentleman tell us today whether the Government want fewer pensioners to be subjected to means-testing than is presently the case?

James Purnell: We have made it absolutely clear—in fact, my right hon. Friend the Secretary of State for Work and Pensions had just done so—that one of the aims of the Lord Turner proposals is to control the spread of means-testing, but the last Conservative Government were, of course, the ones who increased means-testing. I do not think that any party on either side of the House proposes to eliminate means-testing. The key question is how we can target the resources at pensioners in poverty—that is exactly what we have done—and how we can build a consensus around reform for the long term, and we look forward to working with Conservative party and the Liberal Democrats in doing exactly that.

Chris Bryant: I welcome my hon. Friend to his new post. He spent a considerable period serving on the Work and Pensions Committee, so he knows many of these issues. May I urge him, contrary to what has been said, to look particularly at the situation for many women who do not achieve a full set of stamps and for whom simply increasing the basic state pension will do absolutely nothing? If we as a Government are not able to tackle that pensioner poverty, particularly for women, we will not be worth carrying on in government at all.

James Purnell: My hon. Friend is quite right that tackling pensioner poverty for women is an urgent priority. About 30 per cent. of women reach retirement with a full entitlement to a basic state pension, and my right hon. Friend the Secretary of State has made it clear that that will be one of the key things that we will consider in the White Paper. It is not acceptable that women should not have the same broad level of support as the rest of the population.

Anne McIntosh: Speaking for the women, may I congratulate the Minister on his new position and his promotion? It will not have escaped his attention that, by 2010, with the retirement age for women being increased to 65, there will be a net saving for the Government of £10.1 billion a year. Do he and the Labour party agree with the Turner commission that that money should be ring-fenced and spent on pensions?

James Purnell: The hon. Lady is quite right of course that the proposals must be affordable. That is one of the key tests that we have set for the package of proposals. I am not going to give a running commentary on our proposals; we will bring them forward, as we said, by the end of the month, so she does not have long to wait, but I thank her, and my hon. Friend the Member for Rhondda (Chris Bryant), for their welcome. The Select Committee said in its report on pensions that it is important to develop a national consensus, and I now look forward to being able to play my part in implementing that.

Occupational Pensions

James Duddridge: What recent discussions he has had with Treasury Ministers on occupational pension funds; and if he will make a statement.

Anne McGuire: The Secretary of State has regular meetings with ministerial colleagues in the Treasury to discuss a range of pensions issues, including occupational pension funds.

James Duddridge: Will the Minister confirm that more than 60,000 occupational pension schemeshave been wound up or are in the process of being wound up, involving more than 1 million people? Furthermore, will she comment on press stories over the weekend that scheme members are being offered so-called bribes, so that schemes can close early?

Anne McGuire: I am not aware of the speculation that was in the press at the weekend about people being offered bribes. In response to the generality of the hon. Gentleman's question, the Government have taken significant measures to try to improve confidence in the pensions system and to give confidence to individuals to save for their retirement.

Jim Devine: Has my hon. Friend given any thought to taking action againstthe companies and local authorities that, when the Conservative party was in power, took pension holidays and created many of the problems that we have today?

Anne McGuire: My hon. Friend speaks some words of wisdom and I know that they are based on the many years that he spent as a trade union officer dealingwith public authorities under the Conservative Administration. What he says is quite right. The Finance Act 1986 almost actively encouraged employers to take pension holidays, which, in the long term, have proved disastrous for many pension schemes.

Nicholas Winterton: I thoroughly support the Minister in what she has just said about the stupidity of taking pension holidays, because there are good times for pension funds and there are bad times, and the good times will pay for the bad times. However, the original question was about discussions with Treasury Ministers on occupational pension funds. The Minister has already said, in answer to that question, that she wishes to encourage people to save for their retirement. In the discussions that she has had, has there been any talk about those who have saved for their retirement having their pension income taxed at a lower level than the standard rate of tax and the other marginal rates of tax?

Anne McGuire: I thank the hon. Gentleman for his candid comments about some of the pension holidays that were encouraged by the Conservative Administration. I hope that he will also appreciate that this Government have done a lot to support those pensioners who have saved for their retirement—by the introduction of the pension credit and the savings credit. For the first time ever, people are getting some value for the savings that they have made during their working lives.

Pensions (Maladministration)

Peter Bone: If he will make a statement on the Government's response to the conclusion on pensions of the parliamentary ombudsman that she had found injustice in consequence of maladministration which the Government did not propose to remedy.

James Purnell: In his statement to this House on 16 March, my right hon. Friend the Secretary of State undertook to publish a full response to the ombudsman's report. He also confirmed that the response, which we expect to publish shortly, would include an explanation of the Government's estimate of the cost of implementing the ombudsman's proposals. In addition, we have made it clear that we shall expedite our review of the financial assistance scheme.

Peter Bone: An ombudsman is set up to protect people from large and powerful organisations. When maladministration is found, is it not fair, and a duty of that organisation, to compensate those who were wronged? Why have the Government not done that in the case of occupational pensions?

James Purnell: We have great respect for the work of the ombudsman and we sympathise very much with people who have lost out, which is exactly why the financial assistance scheme has been set up. However, we looked at the ombudsman's proposals in great detail and we reject her findings of maladministration and also find that she has not produced any causal link between what the Department did and the winding up of the schemes. Commentators would recognise that those schemes are affected by far bigger factors—in particular, the economic and demographic changes that have taken place.

Julie Morgan: My constituents who worked at Allied Steel and Wire in Cardiff were very disappointed by the Government's response to the ombudsman's report. Is my hon. Friend aware that only 17 people out of a potential 2,000 pensioners from Allied Steel and Wire have benefited from the financial assistance scheme and what can he do about that if he rejects the ombudsman's recommendations?

James Purnell: My hon. Friend has a long record of campaigning on behalf of that group. We have great sympathy with them, as we have with other groups. That is why we not only set up the financial assistance scheme, but are currently reviewing it. It is important that we learn the lessons and look at the administration of the financial assistance scheme to make it easier for people to claim more quickly, which is exactly what we are going to do.

Tony Baldry: Does the Minister accept that he and the Government are setting a dangerous precedent? When Parliament set up the ombudsman scheme, it was for the ombudsman to determine, as a finding of fact, whether there had been maladministration. The Government are now creating a completely new ministerial doctrine and saying that maladministration happened only if Ministers accept that it happened. That is something that affects us all, and every single one of our constituents, in relation to every future recommendation by the ombudsman. Will the Government please go away and rethink the matter? If they continue down this line and say, "Maladministration happens only if we agree with the ombudsman that there was maladministration," there will be no point in having an ombudsman at all.

James Purnell: With great respect, I am afraid that the hon. Gentleman has got the precedents wrong. There are several precedents, including, under the previous Government, the Barlow Clowes affair and the channel tunnel rail link. In both cases, the Government at the time rejected findings of maladministration. It is also worth saying that this Government have put in place the financial assistance scheme, and we will continue to work with his party and others on developing the right proposals. I think that people would agree that it would not be appropriate for the Government to write out a guarantee to underpin private sector saving in this country, which is primarily the responsibility of the trustees of schemes and the individuals involved in the schemes. The information that we put out made it quite clear that it is their legal responsibility to do that.

Anne Begg: My hon. Friend might be interested to know that my hon. Friend the Member for Aberdeen, North (Mr. Doran) and I recently held a meeting in Aberdeen to which70 pensioners who had lost their pensions as a result of the collapse of the Richards pension scheme turned up to discuss the findings of the ombudsman's report. They said that they were looking not for compensation for hurt feelings, but for the money that they had lost. When the Minister examines the financial assistance scheme with fresh eyes—I welcome him to his post—will he find out whether it is possible to ensure that the scheme is at least at the level of the Pension Protection Fund, if not better? Ultimately, it does not matter who is to blame. Individuals have lost money that they thought was rightfully theirs and there is a responsibility for someone somewhere to ensure that they get the money that they were expecting in their old age.

James Purnell: My hon. Friend is quite right to raise the issue. It is devastating for anyone who saved all their life in good faith through an employer suddenly to find that the money is not there. That is exactly what the financial assistance scheme and the Pension Protection Fund are there for. It is worth saying that neither of those measures existed under the previous Government. We will, of course, consider the points that she makes during the review of the scheme that we have announced.

Nigel Waterson: In welcoming the Minister to his new position, may I ask whether he accepts the principle that it is the ombudsman's job to decide what constitutes maladministration, not the Government's? Will he now agree to compensate the 85,000 people who have lost their pensions? Will he take this opportunity to disavow the absurd and misleading figure of £15 billion that has been bandied about as the cost of that compensation?

James Purnell: That is a real figure. It was used by my right hon. Friend the Secretary of State, and it was made clear all the way through that it was a cash figure. We have also made it absolutely clear that when we publish our formal and final response, we will set out the method for calculating it. However, we will not take any lectures from Conservative Members because they have no policy to make good on compensation. They cannot meet the promise, so we cannot take them seriously on the issue.

Lone Parents

Kali Mountford: What plans he has for further measures to encourage lone parents into work.

Jim Murphy: There is a higher proportion of lone parents in work than ever before, but, of course, we want to go further still. Our welfare reform Green Paper builds on the highly successful new deal for lone parents. It sets out proposals for more regular work-focused interviews and the piloting of incentives for those with older children to prepare for a return to work.

Kali Mountford: I am grateful to my hon. Friend for that answer and glad to have the opportunity to be the first to congratulate him on his new post. When he was reading the briefs that he must have had to read this weekend, did he have the opportunity to read the report of the Westminster Hall debate on 2 March during which my right hon. Friend the Member for Barking (Margaret Hodge), then the Minister for Employment and Welfare Reform, and I agreed that a flexible approach for encouraging parents back into work was the best way of dealing with child poverty? If he reads the debate, will he look at the comments of the hon. Member for Yeovil (Mr. Laws) at column 162, and guard against an obligation to work, but allow parents to make proper choices for their families while encouraging them to make the choices that will be best for them?

Jim Murphy: I thank my hon. Friend for her warm welcome. She is right that I had a number of papers and briefings to read, but I am delighted to discover that one challenge that I do not face is trying to work out the Liberal Democrat policy on this or any other matter. My hon. Friend is right—we must find a system that incentivises work for lone parents, as substantially more lone parents are in work than ever before. We must find the right mix of personal responsibility and support such as child care and incentives to encourage people into work. We must help to manage the transition from welfare to work for lone parents, as that will enable us to challenge the poverty endemic among too many families, particularly lone-parent families.

Philip Hollobone: Lone parents are not alone in facing increasingly complicated benefit entitlement rules. In promising to simplify the system, will the Minister congratulate the volunteers at the Kettering welfare rights advisory service and the Kettering citizens advice bureau, as they are working ever harder to guide people through this increasingly complicated process?

Jim Murphy: I am happy to congratulate individuals who work hard on behalf of those people, both in the hon. Gentleman's constituency and constituencies the length and breadth of the country. That is one reason why we are seeking new ways of delivering support for people on benefit to enable them to work, involving both the voluntary sector and the private sector. We are determined to work in partnership with everyone in society to deliver a better deal for people on benefit and to support many more people into work.

Roger Berry: May I also congratulate my hon. Friend on his new post? Does he acknowledge that voluntary sector organisations, whether they support lone parents, disabled people or others back into work, face the problem of one-year contracts for their work, which makes it difficult for them to plan quality provision and retain their staff as the contract comes to an end? Can he give an assurance that the Government will remedy that, because their laudable and ever more ambitious employment programmes will be jeopardised unless those one-year contracts become significantly more favourable?

Jim Murphy: I absolutely agree with my hon. Friend. In my previous position at the Cabinet Office, that point was made very clearly by the National Council for Voluntary Organisations, which believed that one of the first responsibilities of a one-year contract was to renegotiate next year's contract. A large amount of the time was spent negotiating future contracts, so my hon. Friend is quite right. To achieve our ambition of getting ever more people off benefit and supporting them into work in partnership with the voluntary sector, we must provide stability of contract and financial support for the voluntary sector to enable them to deliver that effectively.

Turner Commission

John Grogan: When the Government will respond to the final report of the Turner Commission; and if he will make a statement.

James Purnell: The Pensions Commission has provided the right framework for delivering a long-term settlement for tomorrow's pensioners. The key to delivering sustainable reform is whether it promotes personal responsibility, and whether it is fair, affordable, and based on a real national consensus. We have taken steps to build that consensus through the national pensions debate, reaching out to people in communities across the country. We will bring forward a White Paper by the end of the month, setting out our proposals for pensions reform.

John Grogan: I congratulate my hon. Friend on his appointment. The gain for the world of pensions is a loss for the world of liquor licensing. Is there a distinction between his welcome commitment to control the spread of means testing and the Turner Commission's ambition to make the system as non-means-tested as possible? Is there not much to welcome in the commission's proposal to link pensions with average earnings from 2010, as has been suggested, possibly financed by the planned increase in the pension age for women?

James Purnell: I thank my hon. Friend for his kind words—it certainly makes a change from being the Minister for all-day drinking. I agree that the Turner report set out a comprehensive and well-argued case. Without wanting to sound like a stuck record, we will introduce our proposals shortly.

Greg Clark: Does the Minister agree with the National Audit Office that the complexity of the benefit system deters people from saving for retirement?

James Purnell: We agree that a key test of our proposals is the requirement that they should be simple and sustainable. The current approach, however, is successful in targeting poverty. As I said, we make no apology for lifting 2 million pensioners out of poverty.

Vincent Cable: When the Government respond to Turner, will the Minister take account of something that apparently Lord Turner and current Ministers were not aware of—the revelation that when a majority of nationalised industries were privatised in the late 1980s and early 1990s, the Government entered into an open-ended and unlimited guarantee of their pension fund liabilities?

James Purnell: I do not think that that was unknown. There are individual issues with individual schemes arising from the way they were privatised by the Conservative Government. I believe that there are now no such guarantees built into privatisations.

Pensions Reform

Stephen Hammond: What recent discussions there have been between his Department and the Treasury on pensions reform.

James Purnell: DWP Ministers and officials meet regularly with Treasury colleagues on matters of mutual concern, and pensions reform is one of those matters. We will be setting out the Government's response to the Pensions Commission's report in a White Paper shortly.

Stephen Hammond: Has the Minister noted the comments of the deputy director of the CBI in response to the Turner Commission, that compelling firms to contribute to pensions would jeopardise jobs and growth and would be counterproductive to improving pensions savings in the long term? Is that the view of the DWP and the Treasury, and if not, why not?

James Purnell: That is certainly not the view of those on the Opposition Front Bench who, I understand, have said that they are looking favourably at backing the compulsion in the package. We look forward to working with them on building that consensus. It is a matter that the hon. Gentleman may want to raise with his own Front-Bench team.

Pension Credit

Si�n Simon: What steps he is taking to increase the take-up of pension credit.

Anne McGuire: We are writing to everyone who we believe may have an entitlement to pension credit, encouraging them to apply and advising how the Pension Service can help them do so. Over 2 million mailings are planned during 2006-07. The Pension Service visits around 20,000 people every week who are likely to be entitled to pension credit and provides advice on a wide range of benefitsnot just pension credit.

Si�n Simon: There are 6,700 households in my constituency in receipt of some kind of pension credit, on average 70.70 per household. However, the uptake figure is lower now than it was in November last year. Can my hon. Friend tell me why? Could it be because the forms are too complicated?

Anne McGuire: No, I do not think that the forms are too complicated. I would encourage my hon. Friend not to look just at the figures for one quarter. There has been a slight drop of about 100 in his constituency, but we should look at the overall picture. Year on year we are supporting pensioners through the pension credit and we are taking proactive steps to ensure that they get their entitlement through pension credit. Where they are not claiming housing benefit or council tax benefit, we are encouraging them through our new systems to apply for that as well.

Tom Levitt: I am delighted to be able to tell my hon. Friend that last year or the year before a ward in my constituency had the highest take-up of pensioner benefits of any in the country. Pension credit take-up is too low nationwide, which is partly due to people not knowing what is available, and partly due to people not wanting what they regard as charity. We should take every opportunity to stress people's right to pension credit. Will my hon. Friend consider putting reminders in council tax demands, television licence reminders and so on, so that people will know it is their right?

Anne McGuire: My hon. Friend is right. Language is important, particularly with older people. We have constantly reaffirmed that pension credit is an entitlement, in the same way as council tax benefit and housing benefit are an entitlement. We are working in partnership with a range of voluntary organisations, particularly those that work with older people, to ensure that we get the right message across in the right language. We genuinely want people to claim their entitlement. Members of Parliament also have a key role. The highest uptake in the country in my hon. Friend's constituency is probably related to the fact that he is an active campaigner on these matters.

Brian Jenkins: I applaud the Department for visiting 20,000 pensioners a week and trying to explain to them their entitlement, but those are people who opt in. Our big problem is those who do not opt in, who do not believe that there is something there for nothing, and who do not believe that pension credit is an entitlement. What research have my hon. Friend and the Department undertaken to overcome the problem, which leaves so many of our poorest pensioners out on a limb?

Anne McGuire: We are aware of the problem that my hon. Friend has highlighted, and we recognise that some people do not come forward to claim their entitlement. In addition to dealing with incoming calls, the new Pension Service has made 250,000 outgoing calls to older people who, according to data matching, look like they might be entitled to support. There have been some spectacular successes, where people who have been visited in their homes and who have had their benefits checked have found that they are entitled not only to more money every week, but to arrears, which sometimes run into thousands of pounds.

Post Office Card Account

Jeremy Wright: What recent discussions he has had on replacing the Post Office card account for recipients of benefits.

James Plaskitt: I regularly meet officials, other Ministers and hon. Members to discuss our payment strategy. I met Alan Cook, the managing director of Post Office Ltd, in March, when we discussed the Post Office's plans to develop other savings and banking products, which are likely to be more attractive to many of its customers than the current Post Office card account. Post Office Ltd has already introduced its first new savings account.

Jeremy Wright: The Minister has expressed his confidence that the removal of the Post Office card account will have no noticeable impact on the business of, in particular, small and rural post offices. If that is so, why does he think that other hon. Members and I receive so many letters from postmasters and postmistresses who work in such post offices indicating their serious concern that that move will send them out of business?

James Plaskitt: The hon. Gentleman and others should listen to the comments made by Tricia Jenkins, whois president of the National Federation of Sub-Postmasters and who has reminded colleagues in her federation that the Post Office card account has a limited life. She went on to say that postmasters
	hope to convert existing POCA customers into using another
	Post Office Ltd service, which is starting to happen already. There is no reason to suppose that the end of Government funding for the Post Office card account in 2010 will jeopardise the existence of the Post Office in any way. As I have said, the income stream for sub-postmasters will continue if customers switch to using other post office-accessible accounts or to any successor account to the Post Office card account.

Pension Protection Fund

Robert Goodwill: What discussions there have been between his Department and the Treasury on the cost of extending the Pension Protection Fund to schemes that failed before 6 April 2005.

James Plaskitt: Extending the PPF to schemes that failed before 6 April 2005 has not been subject to discussion.

Robert Goodwill: In rejecting the conclusions of the ombudsman, the Government have let down more than 85,000 people, including those who worked for the failed Scarborough coach builder Henlys, who have had their occupational pensions destroyed. If this is not a contradiction in terms, will the Minister examine Treasury-friendly ways of helping some, if not all, of those whose schemes failed before 2005? May I also ask the Minister to arrange a meeting with the Henlys action group?

James Plaskitt: Other Ministers have already provided thorough answers to the question about the ombudsman, and I shall not repeat answers that have already been given. I remind the hon. Gentleman that the financial assistance scheme is different from the PPFit is funded by the taxpayer; it does not take on members, as such; and it is retrospective. The financial assistance scheme assists those who are most vulnerable and who are most in need of financial support. It has 400 million of Government money behind it; it is under review; and it already supports 17 schemes.

David Kidney: Is it my hon. Friend's judgment that more money will be needed? When the Government provided 400 million of public money for the fund, did they announce that they were looking to the private sector to contribute, too? Was money sought or received from the private sector? If not, are there any plans to encourage the private sector to contribute?

James Plaskitt: Certainly, prime responsibility for this rests with the private sector and the trustees of the fund, who are involved in supporting the Pension Protection Fund. We have introduced a financial assistance scheme to assist those people who are most vulnerable, most at risk and have most to lose, and who could not be brought within the coverage of thePPF because of its retrospective nature. We put up the 400 million of Government funding to support those people. We have undertaken to review that, and the review will be expedited as soon as possible.

Iraq (Basra Incident)

Des Browne: With permission, Mr. Speaker, I would like to make a statement about the tragic crash of the Lynx helicopter in Iraq on Saturday and the immediate aftermath.
	As the House will be aware, on Saturday 6 May at 1350 hours local time, a Lynx mark 7 helicopter on a routine flight came down in Basra city, crash-landing on the roof of an empty building. Five UK personnel on board the aircraft are missing believed killed: Wing Commander John Coxen; Lieutenant Commander Darren Chapman; Flight Lieutenant Sarah-Jayne Mulvihill; Captain David Dobson, Army Air Corps; and Marine Paul Collins. Their next of kin have been informed. I am sure that the whole House will join me in sending my deepest condolences to their families and friends. I also express my sympathy to the families of all those killed in Iraq over the weekend, including those from coalition forces.
	I know that there is a natural tendency when such awful events occur to speculate about possible causes. I caution that such speculation is not only unhelpful but can be very distressing to the loved ones of those involved. As is routinely the case in such circumstances, a detailed technical and Royal Military Police investigation is under way. An air accident investigation team is in place, and a full board of inquiry is being conducted. I can, however, confirm at this stage that the helicopter was fitted with a defensive aids suite, as are all our helicopters in Iraq.
	British Army units in Basra deployed immediately to the scene of the crash and secured the area with the help of the Iraqi army and the Iraqi police service. A crowd swiftly formed on the streets surrounding the crash site, and the House will have seen television coverage of the volatile situation that developed over the next few hours. I am very grateful to the Iraqi authorities for the assistance provided by the Iraqi army and police to bring the situation under control, including the imposition of a curfew by the provincial governor.
	British troops and Iraqi security forces came under attack with a variety of weapons, including stones, gunfire, petrol and blast bombs, rocket-propelled grenades and mortars. It is entirely right that our troops take action to defend themselves in such circumstances. I can confirm that British personnel fired baton rounds and a limited amount of live ammunition. Seven UK personnel were injured as a result of the disturbance. According to the information that I have, none of those injuries was serious.
	Local reports and our own sources indicate that five Iraqis may have died, and approximately 28 were injured during the civil disorder that followed the crash. The full extent of UK military responsibility for any of those casualties will be clarified in due course, following completion of the post-incident review. In circumstances such as these, such a review is normal.
	I know that some commentators have concluded that the television footage that we saw on Saturday is evidence that southern Iraq is rising up against the British presence and that we should withdraw all troops immediately. I do not share that assessment, but, more importantly, nor do the commanders on the ground, including Major-General John Cooper in Basra.
	To put that in its proper context, the disturbances on the ground involved a crowd of 200 to 300 people. Although magnified by the media images we saw, the incident was an isolated incident in a city of around 1.5 million people. Crucially, it was brought under control by the Iraqi security forces themselves in a few hours. Since then, the city has remained calm. That is testament to the commitment and bravery of the Iraqi personnel and to the work that we and other members of the coalition have been doing to train the Iraqis to prepare them for taking on responsibility for the security of their country, where more than 12 million Iraqis showed courage in voting for a new Government.
	The House will be aware that relations with the Basra provincial council have been difficult over the past eight months or so. Yesterday, the governor of Basra announced a return to full co-operation and dialogue between the council and British forces. Indeed, members of the council expressed their profound regret for the incident and extended their condolences to the families. That reinforces our belief that the majority of the people of Basra want to work with us to develop governance and security in the region.
	That is not to say we should be complacentfar from it. The crowd on Saturday appears to have included elements that were armed with mortars and rocket-propelled grenades, and were prepared to use them against British forces. Major-General Cooper has confirmed that he is content with the numbers and capability of the troops at his disposal but I assure the House that we keep force levels under constant review.
	I am also aware that some have called for the Government to set out our exit strategy from Iraq. That strategy has been set out before the House many times, most recently on 13 March by my predecessor, now the Home Secretary. However, let me be clear. We are still committed to remaining in Iraq for as long as we are needed and the Iraqi Government want us to stay, and until the job is done. That job is to assist the Iraqi Government and their security forces to build their capabilitiesmilitary and civilianso that they can take on full responsibility for the security of their country. Achieving that objective is the exit strategynothing more, nothing less.
	Multinational forces continue to train and mentor the Iraqis to develop operating effectiveness. Currently, there are more than 250,000 Iraqis in their security forces, including 115,000 in the Iraqi army.
	The incident was serious, but, despite that, we can draw some encouragement from the fact that local forces worked with us to restore order on Saturday.
	I express again my deepest condolences for and sympathy to the families of those killed on Saturday and to the colleagues they leave behind in the Royal Navy and Royal Marines, the Army and the Royal Air Force, especially those who continue to serve with such bravery to help the people of Iraq build a secure and stable future for themselves.

Liam Fox: I echo the condolences that the Secretary of State expressed and extend Conservative Members' sympathy to the families and friends of those who were killed.
	This tragedy has seen our most senior servicemen so far and our first servicewoman killed in action in Iraq. It is worth remembering that they are not there as an army of occupation but represent hope for the majority of the Iraqi people, who want to live in a democratic system, with a fair rule of law and under a constitution that they designed. In paying tribute to those who were killed, we should remember that they were there fulfilling a noble purpose.
	I welcome the Secretary of State to his new job but I am sorry that such a sombre occasion brings him to the House. I should like to ask him about four broad matters. Many of those who have been in Iraq recently say that the Army's footprint in Basra is so reduced that we seem more like visitors in the city than in control of it. The Secretary of State said that Major-General Cooper is happy with the number of troops at his disposal. Is he happy that sufficient reinforcements are available to deploy quickly to deal with the unexpected? Will the Secretary of State assure us that there will be no further troop withdrawals until he has satisfied himself on the point?
	There was speculation over the weekend that the helicopter may have been brought down by a rocket-propelled grenade or similar device. Like the Secretary of State, I do not see any point in speculating further on that. Will he, however, look into the operational capability of the Lynx helicopter, especially its speed and its ability to operate in hot weather, as those factors could contribute to its vulnerability? Will he also look into the early procurement of more Lynxes to ensure that we minimise the risk to our servicemen and women not only in Iraq but in the read-across to Afghanistan?
	The House will be pleased that the Secretary of State talked about the restoration of co-operation with the local authorities. Given that our servicemen are putting themselves at risk for the people of Iraq, however, most people in the United Kingdom would be horrified by the idea that they were not getting the full co-operation of those authorities. Will the right hon. Gentleman take the opportunity to ask the new Foreign Secretary to raise with the Iraqi Government the role of the governor of Basra, because maintaining security and safety on the ground is one of the ways of maximising the protection of those in the air?
	The Secretary of State mentioned a number of weapons that are available to insurgents and terrorists in Iraq. Does he have any information on the origins of those weapons? His predecessornow the Home Secretarytold the House that there was evidence that weapons were coming in from Hezbollah. I want to know whether there is further evidence of any weapons coming directly from Iran, either from the Government there or via Hezbollah, because that also has a major read-across to what is happening in Afghanistan.
	Mistakes have been made in Iraq that have made our involvement there more difficult and probably longer than needed. However, I completely agree with the Secretary of State that early withdrawal is not a solution for the people of Iraq or for stability in the region. The Government have a duty to maximise the success of the mission in Iraq, and to minimise the risk to our servicemen and women. I hope that the Secretary of State will take advantage of his new position to look into the issues that I have raised today, and to ensure that he is confident that he is fulfilling both those tasks.

Des Browne: I thank the hon. Gentleman for his expressions of condolence. I also thank him for his manifest support for our objectives in southern Iraq and for his often-articulated appreciation of the dedication and courage of our armed forces. He has raised a number of issues, and I shall endeavour, within the state of my current knowledge, to respond to them. Incidentally, I also thank him for welcoming me to my new position. We shall have the opportunity to share the challenges that we face together at some time in the future, and I look forward to working with him.
	The hon. Gentleman asked about the sufficiency of troops. He can be reassured that my first task on Saturday morning, as the tragic circumstances in Basra started to unfold on my television screenas they did on others across the countrywas to make inquiries about the sufficiency of our troops. Having spoken directly to those who command our troops in southern Iraq, and to the service chiefs, I have confirmed that none of them believes that our armed forces are insufficient for the operations with which we have tasked them in southern Iraq.
	The hon. Gentleman also asked about support, should it be necessary. I commented on that issue in the media over the weekend, and I can reassure him that there are dedicated reserves available for Iraq, should they need to be deployed. The deployment of troops to Iraq, or to any other theatre, will depend on the advice of those who know best, namely those who lead our armed forces.
	The hon. Gentleman mentioned the capabilities of our equipment, and in particular of the Lynx helicopter. As I said in my statement, a board of inquiry will ensue, and it will be informed by the investigation that is now taking place. I am not in a position to pre-judge that inquiry, and I would not seek to do so to any extent at the Dispatch Box. I will say to the hon. Gentleman, however, that we will respond to the recommendations of the board of inquiry in the same way that we have sought to respond to the recommendations of any such board in the past. I can also give him an assurance that we will implement the recommendations of any such board of inquiry. However, it would be speculation at this stage to suggest that anything relating to the capability of the equipment made a contribution to the circumstances of the incident. The hon. Gentleman asked about our relationships with the provincial authorities, and I am clearly able to say that they are improving. They were improving in any event, never mind the incident that took place on Saturday. It is of some reassurance to me that, despite the incident on Saturday, the meetings that were planned to progress those relationships took place in any event and had the outcome that I have described to the House.
	The hon. Gentleman asked, in particular, whether my right hon. Friend the Foreign Secretary will raise with the Iraqi Government the issue of the provincial governor in Basra. I assure the hon. Gentleman that the former Foreign Secretary raised this very issue on more than one occasion with the provisional Government in Iraq, and I have absolutely no doubt that my right hon. Friend the current Foreign Secretary will do exactly the same thing should she have the opportunity to do so.
	Finally, the hon. Gentleman asked about the provenance of the weaponry that may have been in the hands of the crowd. We are still in the early stage of the review of the circumstances and, as I understand it, the troops who were present have not been fully debriefed, so I am not in a position to speculate on that issue. However, when my right hon. Friend the former Secretary of State for Defence discovered the provenance of improvised explosive devices, he told the House and the public of the United Kingdom of their provenance. I would intend to do the same if such information became available to me.

Nick Harvey: I echo most sincerely the words of condolence to the families of those who have lost their lives. This is certainly the news that all families of personnel on active service must dread.
	I entirely accept that it is unhelpful at this stage to speculate on the cause of the helicopter coming down. However, can the Secretary of State assure us that he will return to the House, when it has proved possible to find more information, so that we can have a greater discussion when we know the picture of what happened and the implications for our operations in southern Iraq? Can he tell us also whether it has been possible to secure the accident site satisfactorily in order to carry out the investigations necessary?
	Helicopter operations are intrinsically hazardous, and I suppose that such an incident could have occurred at any point in the past. Given that helicopters will play a vital part in our operations in Iraq and in Afghanistan, could the Secretary of State acquaint himself with the problem of the shortage of transport helicopters and trained personnel? Is he aware that the Minister responsible for defence procurement, acknowledged the 15 per cent. shortfall and said in answer to a question in another place that it might take 18 months for decisions to be made? Given the fact that the likely attrition rate of helicopters cannot be ignored, will the Secretary of State take steps to accelerate consideration of that issue?
	The Secretary of State referred to an exit strategy and he restated the objective. He said that the job is to assist the Iraqi Government and their security forces to build their capabilities so that they can take on responsibility for the security of their own country. I think that everyone shares and understands that objective. He said that achieving that objective is the strategy. With respect, a strategy needs to be rather more detailed and comprehensive than simply the desire to achieve the objective. If we do come back to discuss these matters again when a little more is known about them, will he undertake to bring a more detailed strategy so that Parliament can probe the progress that is being made, so that the British public can have an understanding of the progress that we think that we are making and so that the Iraqis understand it too?
	I welcome the Secretary of State to his new post and congratulate him on his appointment. It is regrettable that his first duty in the House should be in such tragic circumstances but, when he has had a chance to assimilate more information about the issue, will he return to have a broader debate about the progress that we are making in Iraq?

Des Browne: I thank the hon. Gentleman for his welcome, but more importantly I thank him for his expression of condolences to the families who have lost their loved ones and the friends of those who have been killed.
	The hon. Gentleman asks specifically whether the results of the investigation into the cause of the incident will become known. A full board of inquiry is in progress. At this stage, an investigation is taking place by a highly qualified team of expert investigators, and the results will inform the board of inquiry. As I understand it, the process is that its results will be made public, to the extent that they can be without undermining the security of our personnel in theatre. He has my assurance that the board of inquiry will proceed in a way that is no different from any other in such circumstances.
	The hon. Gentleman can be reassured that thanks to the support of the Iraqi army and police force, which put themselves on the front line between those in the crowd who were intent on harming our forces and, indeed, did harm them, the accident site was secured. The information I have is that although it was a very difficult and complex site, the necessary investigations were able to take place. I am unable to inform the House whether investigation of the site has concluded, but in any event all that information will be brought together and inform the board of inquiry's determinations.
	The hon. Gentleman raises a question on the sufficiency of equipment, in particular helicopters. I assure him that we keep the amount of equipment and the nature of equipment under review, and we will respond to requests from theatre. In the context of this statement and the circumstances that have brought me to the House, it is far too early to say what the implications of the incident are for equipment or indeed the operating procedures of that equipment. It would be pointless to speculate at this stage.
	On the exit strategy, having succeeded the former Secretary of State for Defence, I come to the House at least with the assurance that nobody can suggest there is a lack of clarity about the communication of the Government's position, which he explained and repeated on a number of occasions. The response of the Iraqi forces, particularly the army and the police, on Saturday, in very difficult circumstances, is an indication not only of the direction of travel towards that exit, but of the progress that we have made, some of which would have been unthinkable only a matter of months ago.

Gavin Strang: I add my congratulations to those given to my right hon. Friend at this sombre time, when we have lost five more dedicated service personnel.
	Accepting, as my right hon. Friend said, that more information is coming in on the confrontation that took place after the helicopter came down, is it none the less the case that two Iraqi youths were shot? If so, should we be concerned about the effect those deaths might have on the attitude of the local population to the British forces?

Des Browne: I thank my right hon. Friend for his welcome. Certainly, it would not have been my wish to be welcomed to my new position in these circumstances.
	On the specific point, I cannot confirm that a child or children were killed or wounded, and it would be unhelpful to speculate on such matters. Those who were at or about the scene in the immediate aftermath of the crash saw a large proportion of relatively young children in the crowd. However, I am not able to confirm at this stage that a child or children were killed or wounded.

Iain Duncan Smith: I welcome the right hon. Gentleman to his new position and wish him all the best.
	The right hon. Gentleman was rather cynical about the coverage by broadcasters of the uprising that may or may not be taking place. I join him in that cynicism, but I draw his attention to one matter of concern. I hope that he will be able to comment on it, but if not, he will certainly be able to focus on it in the coming days. It is not the number of people on the streets, with which I am sure we can deal, that is the major concern, but the widespread use of anti-air missiles. Will he confirm that there have been previous attacks on helicopters using such weapons?

Des Browne: I thank the right hon. Gentleman for his welcome, and for his overt and often-expressed support for our troops.
	I had not sought to raise the issue of cynicism in my remarks about the media coverage. The point that I wished to make was probably better expressed by General Cooper in his interviews on Saturday evening and late at night. He said to the BBC reporter interviewing him that the film being repeated in relation to the story was now some hours old. Basra city had been calm for some time, and as it turned out, it was calm overnight, calm yesterday and calm overnight again. My point was that those who are interested in these matters and who will pay attention to what I say at the Dispatch Box ought to knowthis is no criticism of the media authoritiesthat the repetition of historical footage, even if only hours old, can give an impression of repeated and continuing disorder on the streets, when the fact is, as I understand it from our people on the ground, that everything was brought under control within about four hours.
	The right hon. Gentleman asked me to confirm what he already knows. As I understand it, helicopters have been brought down in Iraq, although not in our area of operation, in the way that he describes. It would be inappropriate and unhelpful to speculate at this stage of the inquiry into the incident as to how this particular helicopter came to crash.

Jeremy Corbyn: I echo the condolences offered by the Secretary of State to those who lost loved ones over the weekend. Is he aware that 109 British personnel, more than 2,000 Americans and tens of thousands of Iraqis have died since war was declared more than three years ago? Can he set out a timetable by which he expects British and American troops to withdraw from Iraq, as their continued presence seems increasingly to be part of the problem rather than the solution?

Des Browne: My hon. Friend puts into the public domain a figure that is burned into my mind, and that figure will be with me for all the time that I do this job and for the rest of my life. He does not need to remind me of that figure or of the tragic consequences of these circumstances. If he seeks to persuade me, in my new-found responsibilities, that early withdrawal from Iraq is an objective for which I ought to argue, he has not found an ally. As those whom we charge with the responsibility for doing this difficult job told us from southern Iraq this morning, in an interview through their representatives, they have a job to do and it needs to be seen through. In my view, we have a commitment to remain in Iraq as long as we are needed and the Iraqi Government want us there, and until the job is done. In my new-found responsibilities, I will do everything to support and help those whom we have asked to do the job at the front line.

David Heath: Three of those missing came from royal naval air station Yeovilton in my constituency. The words of shock and loss expressed by the Secretary of State will be shared by those associated with the squadron, which I had the privilege of visiting only a few months ago, and by the entire Yeovilton community. He was kind enough to say to my hon. Friend the Member for North Devon (Nick Harvey) that he would report further to the House once he had the results of the board of inquiry. Will he also take testimony from those who know best the hazards of this sort of flyingthe air crew who engage in it day in and day out, week in and week out, on behalf of this countryand make sure that their views are fed into any future action that he takes?

Des Browne: I welcome the opportunity to pay tribute to the hon. Gentleman's constituents based at RNAS Yeovilton for the work that they do. I fully understand the tremendous sadness that there will be at the loss of colleagues. However, what we expect of our armed forces, and what we have got over the past 24 hours, is a renewed commitment to continue to do the jobs with which they are tasked, even in these difficult circumstances. Although there is sadness, I have experienced over the past 24 hours a degree of dedication and courage that is a manifestation of why our armed forces are the envy of the world.
	The hon. Gentleman asks who should give evidence to the board of inquiry, and my current state of knowledge is that it would be expected that evidence would come from the sort of sources that he indicates. I apologise for this, but I cannot at this stage tell him for certain whether his specific question about the procedures involved in the inquiries can be answered in either the affirmative or the negative. I would be astonished if the board of inquiry, whose procedure is not in my control, did not take evidence of that kind, but I shall look into the matter. If there is any additional information that should be given to the hon. Gentleman or the House, I shall take the necessary steps to ensure that that is done.

Harry Cohen: May I associate myself with the condolences that have been expressed? My right hon. Friend described some of the Iraq casualties as youths, but two were reported to be children aged 10 and 11. Will that be considered by the inquiry, and will the Iraqis be able to contribute to it? The exit strategy announced by the Secretary of State was lamentable. If it is a question of whether the police are ready, it should be borne in mind that it was the British troops who, I am afraid, inflamed the crowd and the police who helped to quieten it. Unless there is a proper time scale, there can be no real exit strategy. May I ask the Secretary of State to think about that again?

Des Browne: My hon. Friend can be reassured that since I began this job, our commitment to Iraq has been at the forefront of my mind. It is constantly in my mind. Whatever our respective positions may be on whether we should have engaged in the war in the first place, the fact is that we are in Iraq now, under the terms of United Nations resolution 1637, and we have a specific job to do in that context, along with our allies. I look to my hon. Friend, and other Members, to support those whom we charge with the responsibility of carrying out that task in very dangerous circumstances.
	The four elements of the exit strategy set out by my predecessor, the present Home Secretary, in the House and elsewhere appear to me to provide a template for an appropriate withdrawal, and not to lend themselves to demands, such as my hon. Friend's, for a specific timetable. I am sure I shall learn more about whether this is the case, but I suggest to my hon. Friend that it is arguable that we would put our troops in danger if we did what he has invited me to do.
	With respect, I must correct my hon. Friend, in that I am not aware that any part of my statement reflected, in any sense, the ages of any possible casualties in the group who were involved in the disorder surrounding the incident. I give my hon. Friend the answer that I have given others: I am not in a position to confirm the age, or any other details, of anyone who may have been a casualty in that crowd.

James Arbuthnot: In welcoming the Secretary of State to his new position, may I warn him that he has a hard act to follow? He has, however, made an excellent start, not only in coming to the House so quickly to make his statement but in his expression of the sympathy that we all feel for the families of those who have died. It is difficult to find the good news in statements such as this, but the news that the governor of Basra has resumed co-operation with the British authorities is undoubtedly good news. Will the Secretary of State tell us what form he expects that co-operation to take? Does he regard it as a signal that the Iraqi authorities are unlikely to wish to break off relations again, despite the challenges that he, we and they will face?

Des Browne: I thank the right hon. Gentleman for his welcome. I am all too aware of the comparisons that will be made between my predecessor and me, and of what will be said about the skill with which he carried out his duties. I am a great admirer of my right hon. Friend who is now the Home Secretaryas, obviously, is the right hon. Member for North-East Hampshire (Mr. Arbuthnot)and I think that he did an admirable job as Secretary of State for Defence. Despite the challenge that that poses, there could be no better person to follow. I shall observe the template that my right hon. Friend established for the job as far as I can, but I shall try to be my own person as well. Even in these early days, it is clear to me that the working relationship between my right hon. Friend and the right hon. Gentleman and his Select Committee was productive and supportive, if challenging. I hope to continue that relationship.
	The right hon. Gentleman asked me a question that, unfortunately, I cannot answer specifically, except to say that we are pleased that the relationship to which he referred has been remade against the plan that we had set out, despite the fact that this incident occurred in the past couple of days. That relationship will be a partnership, the whole purpose of which will be to sustain that relationship towards transition. I am sure that the challenges that the right hon. Gentleman set out are only too well known and accepted by those on the ground in Basra with whom we charge those responsibilities. The extent to which they have moved the position with the council and the governor, despite the pressures that must have been generated by the events of the past couple of days, is testimony to the robustness of that relationship.

Kevan Jones: I add my condolences to those expressed to the families concerned, and I welcome my right hon. Friend to his new post. As someone who has been to Iraq four times in the past three years, most recently in March, I concur with my right hon. Friend's view that southern Iraq is not on the brink of civil war, and I agree that the capacity of the Iraqi armed forces and police in southern Iraq has been increased. But can he assure the House today that British troops will not be withdrawn before those security services have the capacity to ensure that the security that local people need can be delivered?

Des Browne: I thank my hon. Friend for his welcome. His support for our forces in Iraq, which he has expressed by visiting that country, is very welcome and much appreciated. I can give him an unequivocal and positive response to his question; indeed, the answer to it is implicit in the conditionality set out by my predecessorto which I adhereconcerning the transition and the draw-down of troops from Iraq. However, that is but one aspect of one of four conditions; the others will also have to be met before we proceed.

Desmond Swayne: The Secretary of State referred to the television footage, but notwithstanding the dreadful events and shocking scenes that we witnessed, does he not agree that the television camera is of necessity a distorting lens, and that for the most part, the huge majority of the people of Basra had an ordinary day?

Des Browne: The hon. Gentleman makes a very good point. If, in a city of 1.5 million, 200 to 300 people of a very obvious age range are involved in a disturbance, it is clear, by a process of elimination, that others are not. My understanding is indeed that the rest of the city was going about its normal business on that day. The hon. Gentleman's point about media coverage is partly true. I was brought up to believe that the camera never lies, which is probably right; it is how one deploys what the camera produces that may well givesometimes inadvertentlya distorted picture in its totality. But we live in an age of 24-hour news and visual news, and it is incumbent on us to accommodate that fact when communicating information ourselves. I take this opportunity to express my personal thanks to General Cooper and others, who, in very difficult circumstances, made themselves available to the media in order to give an authoritative voice from the theatre and to explain what was happening on the ground. I had no doubt, as I watched the coverage unfold on Saturday, that that was very helpful in shaping the development of later coverage.

Sarah McCarthy-Fry: Like others in all parts of the House, I want to pay tribute to those who lost their lives this weekend and to welcome my right hon. Friend to his new position. I was in Basra in March, along with my hon. Friend the Member for North Durham (Mr. Jones), and I spoke to senior military officers, who agreed that there is a fine line between our presence there being part of the solution and being part of the problem. However, they are much of the opinion that our presence is still part of the solution, because we are training the Iraqi forces to manage their own security and thereby reducing the need for the British presence in the long term. Given the support given by the Iraqi forces to the British troops to quell the unrest after the crash, does my right hon. Friend agree that that is yet another indication that we are still part of the solution, not part of the problem?

Des Browne: I agree, and I am all too acutely awareas are those who lead our armed forcesthat there is a constant tension between being seen in a positive light and getting to the stage where that becomes a difficulty. It is the very appreciation of that tension that has instructed the way in which we approach the whole issue of transition.

Malcolm Rifkind: I congratulate the Secretary of State on his appointment. As a former Secretary of State for Defence, I have no doubt that he will find working in the Ministry of Defence and with the armed forces both a privilege and a pleasure. With regard to his statement, I am less impressed than he appears to be by the announcement by the governor of Basra that he is willing to resume co-operation with our security forces. Does the Secretary of State agree that it is intolerable that, at a time when our armed forces are not only risking their lives butas we have sadly heard todaylosing them, that the governor of Basra and his colleagues should consider it a matter of choice whether they co-operate with British security forces? Will the Government impress on the Government of Iraq at all levels that unless we get the fullest co-operation from the Iraqi security authorities as a matter of course, it will be impossible to sustain a British military presence in that country?

Des Browne: I thank the right hon. and learned Gentleman for his welcome. He can be assured that in the short time that I have been in the Ministry of Defenceand I have been in the Ministry itself for practically all the time that I have been the Secretary of State for DefenceI have already come to the same conclusion that he urges on me. In relation to the conclusion that he draws about the necessity of co-operation with the provincial authorities in reaching the joint objective of being able to hand over, he is rightand he can rest assured that we will take any opportunity to impress those arguments on the Iraqi authorities. I do not suggest that the steps that have been taken over the past few days are the eventual solution to the challenge, but they are certainly a step in the right direction. Because of the significant hard work by people on the ground in relation to the authorities, those steps are in a direction that would have been unthinkable a comparatively short time ago.

Elfyn Llwyd: I add my personal condolences to all the families who lost dear ones, on behalf of myself, my party and the Scottish National party. I was in Basra last year and I picked up much anger and some resentment about the infrastructure that still needed repair, such as sanitation, clean water and electricity. I appreciate the fact that the right hon. Gentleman has only just come into his post, but I urge him to see whether more can be done to reinstate those necessary services.

Des Browne: I thank the hon. Gentleman for his expression of condolences on behalf of the parties for whom he speaks, and I accept and welcome them on behalf of those for whom they are intended. I am in no doubt that as well as the military objectives that we set ourselves, the reconstruction objectives are very important to pacification and the restoration of normality of life and opportunity for the people of Iraq. The hon. Gentleman does not need to remind me of that, but he makes a valuable point. I know that the long-term pacification of Iraq and the opportunity for its citizens to live a full life in a democratic societyas they want to dodepends on both coming together.

Boris Johnson: In paying tribute to the sacrifice of the Lynx crew, two of whom came from RAF Benson in my constituency, I wish to ask the Secretary of State whether he agrees that the risks to British forces seem to have increased considerably in the past year. If he does agree, could he give a political analysis of why that might be the case and what we can do about it?

Des Browne: I thank the hon. Gentleman for his contribution. Because of his constituency interest, I am aware that he will face some responsibilities in relation to the consequences of the incident. If we can give him any support, he need only ask. He asked me to make a comparative analysis of the level of risk. Given the time that I have been at the Ministry of Defence, it would be inappropriate for me to accept his invitation to do that. However, on the assumption that the assessment is correct, it would seem to me to be a reflection of the response of those who want to stop Iraq moving and making a transition to where we all want it to be, because the progressalbeit tentativethat I have been talking about from the Dispatch Box today must be as manifest to them as it is to us.

William McCrea: I welcome the right hon. Gentleman to his new post and wish him well. On behalf of my right hon. Friend the Member for North Antrim (Rev. Ian Paisley) and my hon. Friends in the Democratic Unionist party, I express sincere sympathy and extend our condolences to all the families who have endured such loss. No one can understand the grief or pain that they are going through, and our hearts go out to them. I assure the Secretary of State that the people of Northern Ireland will stand four-square with our soldiers who have gone to the front line in defence of freedom, and assure them of our support while they fight the battle in Iraq.

Des Browne: All I can do is express my thanks to the hon. Gentleman for his contribution. Because of the tragic experiences in the all too recent past of the people whom he represents, there is a certain poignancy in his remarks. I know that they will be even more greatly appreciated by those for whom they are intended, because they are informed by the experiences of the hon. Gentleman and others in Northern Ireland.

Patrick Mercer: The Secretary of State will be aware that in the next few days the bodies of the dead will come back to RAF Brize Norton in Oxfordshire, where the Oxford coroner will have to carry out inquiries into the deaths. A coroner's inquiry has yet to be mounted in more than 60 cases, and it is no exaggeration to say that the families of the dead cannot complete the mourning process until those inquiries have been carried out. Will the Secretary of State assure the House that the coroner will have the assets that he requires to make sure that the families of those heroes and that heroine receive their due reward?

Des Browne: The hon. Gentleman raises an important matter, of which I have to confess that I was unaware when I came to the Dispatch Box; he brings it to my attention entirely appropriately. However, because of information that I received as he was asking his question, I am able to assure him that we have already identified additional resources and that we are actively looking at ways to achieve the objective that he sets out. I can understand the effect that such delay would have on those who are grieving, and from my period as Minister with responsibility for victims in Northern Ireland, I know how important it is for people suffering such losses to have closure for certain stages of the grieving process. The hon. Gentleman can rest assured that I shall look at the matter with some urgency.

Crispin Blunt: Having marked the right hon. Gentleman in his first ministerial job, I give him my genuine personal congratulations on the assumption of a great office of state, while deploring the appalling circumstances that bring him to the House of Commons so early in his tenure. May I draw his attention to the fact that he did not challenge the assumptions underlying the question from my hon. Friend the Member for Henley (Mr. Johnson) about the deterioration of the security situation for our troops in southern Iraq? In an incident completed in four hours, rocket-propelled grenades, mortars and small arms were concentrated against our armed forces and the evidence suggests that the situation with regard to popular opinion towards our armed forces in southern Iraq has gone from relatively benign in 2003 to quite difficult. Will the Secretary of State bear that in mind, and apply the lessons to Afghanistan, where in Helmand province the situation is likely to be much more malign?

Des Browne: I thank the hon. Gentleman for his kind remarks; I know that his expressions of congratulation and support are genuine. With respect, he may have misunderstood my response to his hon. Friend's question, although they are genuinely in the same area. I sought not to respond to the question from a basis, effectively, of ignorance, I concede: his hon. Friend asked me to draw a comparison about the risk, and I do not feel able to do sobut what I can say, of course, having spoken to those who on the ground, is that, in the parlance that they use, we appear to be going though a spike of violence. Their assessment of that, however, was reflected in the answer that I gave his hon. Friend, which was that it is an expression of the determination of those who want to stop Iraq becoming a democratic and free country, because they can see the direction of travel that is going on. I am afraid that I must disappoint the hon. Gentleman in response to the peroration of his question, because he invites me into a whole other theatre of conflict, and if the House does not mind, I will restrict myself to questions about the incident and Iraq at this stage and not be drawn into discussing Afghanistan at the moment.

Michael Penning: As a former guardsman who served in a unit when one of my colleagues went missing in action, whose body has never been found, I am deeply concerned that the Secretary of State's statement said missing believed killed. Can the Secretary of State let us know where the remains of our heroes are? Are they in the British Army's possession, so that we can bring them home and let them rest with their families and loved ones?

Des Browne: The hon. Gentleman draws me into a level of detail that I have been urged not to be drawn into by those who are responsible for the health and welfare of the families of those missing, presumed killed. Over the past 48 hours or thereabouts, Ihave been schooled in the vocabulary of these announcements, but I can give the hon. Gentleman the assurancehe will know this from his own experiencethat the armed forces are giving the families of those whom we believe were killed in the incident the level of support that would be expected. I have absolutely no doubt that there is a level of communication going on there that would be entirely inappropriate in public.

Peter Bone: The loss of five brave servicemen and women is truly a terrible event. I should have thought that the immediate crowd on the ground would have been there to see whether they could help our servicemen. As the Secretary of State has stated, 200 to 300 people appeared to celebrate the downing of the helicopter. Will he explain or give some indication of what he thinks the motives of that crowd were?

Des Browne: With respect, I am probably the last person on earth to be asked about the motives of a crowd in Basra, but I can tell the hon. Gentleman about my own professional experience prior to my election to the House, when I practised for some time in the criminal courts in Scotland. Unfortunately, on occasion, serious violent incidents arose from the behaviour of mobs and/or crowds. The one thing that I learned during that time was that it was very difficult to try to get to the bottom of the behaviour of a crowd of people. Sometimes crowds of people come together for perfectly innocent reasons, and then behave in mob ways that are difficult to fathom. That was my experience. I was reinforced in that analysis by comments that have come directly from officers in Basra in communications and interviews over the weekend. I have heard, I think, Brigadier Everardif I have identified the wrong officer, I apologiseexpress exactly the same emotions in response to a question that he was asked in an interviewon the BBC, I think. It would be unhelpful to speculate about why things may have happenedbut one can hope that the investigations will reveal some information that will enable us to ensure that they do not happen again.

Tobias Ellwood: I join the Secretary of State in echoing the condolences to the families. My local regiment was part of the response unit that went to help with the helicopter crash. However, wider questions are raised about how Iraq is progressing, as was mentioned by my hon. Friend the Member for Reigate (Mr. Blunt). What we endured here in the UK, in London on 7/7, would be an average day in Iraq. We lost about 50 civilians on that day. In Iraq, 1,300 civilians are lost every month; there is an average of 60 attacks a day, and about 30 bodies are found on the streets every day. How high must the death toll rise until the Secretary of State agrees that there is a state of civil war? How long must we endure the hostilities between the Shi'ites and the Sunnis before the Secretary of State acknowledges that Iraq might be better off if it were encouraged to divide peacefully into three separate states?

Des Browne: I think that the hon. Gentleman seeks to encourage me to give a figurewhich, of necessity, would be arbitraryfor a point at which we would automatically change our position. I do not wish to repeat what I have already said in the House: I have made my position as Secretary of State for Defence clear, and it is entirely consistent with the Government's position and that expressed previously by my right hon. Friend the present Home Secretary when he was in this post. In my view, wherever we come from as regards the endeavour in the first place, we are there now, and we are mandated by the United Nations to carry out a job. That job needs to be done. My objective in this post is to support those whom we have tasked with that job. The issues that the hon. Gentleman raises have been responded to many times from the Dispatch Box, and I can add nothing to the clarity of answer that he has no doubt received in the past.

Points of Order

Nicholas Winterton: On a point of order, Mr. Speaker. I seek your advice because of my concern for the reputation of the House. During Question Time the Minister for Pensions Reform mentioned Barlow Clowes, a company that operated in my constituency. I believe that he and the House should know that that company went bump, and that the Government paid out substantial sums of compensation to the investors, which was not the implication of his response to the question. I hope, Mr. Speaker, that you feel that it was appropriate to make the position clear, because of the matter relating to my constituency.

Mr. Speaker: That was not a point of order, but the hon. Gentleman has put the matter on the record.

Andrew Robathan: On a point of order, Mr. Speaker. About an hour ago I approached the Table Office to find out about Deputy Prime Minister's questions on 17 May, and whether there had been a change. I was told that there had been no change, but one was expected. I seek your guidance on this matter, because I note that when Lord Heseltine was Deputy Prime Minister, without any other responsibilities, between 1995 and 1997, he came to the House to answer questions. The current Deputy Prime Minister will have Government responsibilities. Is it your opinion that he should therefore come to the House to answer to it for those responsibilities?

Mr. Speaker: These matters are about arrangements that have yet to come. As I have said to the hon. Gentleman and the House before, we are best to worry about today, and look after tomorrow when tomorrow comes.

Bob Spink: On a point of order, Mr. Speaker. Have you received notification of the Foreign Secretary's intention to make an urgent statement to the House and to answer questions on the extremely good news for the relatively safe and secure Kurdish region of Iraq? The Kurdistan Prime Minister Barzani today presented the region's new unified Government and Cabinet, who are pledged to protect and respect all citizens of the region with transparency and democratic accountability. With so much bad news, we should be able to make time for good news of such historic importance.

Mr. Speaker: The hon. Gentleman has given us the good news, and we will move on from there.

Civil Aviation Bill (Programme) (No. 2)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6) (Programme motions),
	That the following provisions shall apply to the Civil Aviation Bill for the purpose of supplementing the Order of 27th June 2005 (Civil Aviation Bill (Programme)):
	 Consideration of Lords Amendments 
	1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement at this day's sitting.
	 Subsequent stages 
	2. Any further Message from the Lords may be considered forthwith without any Question being put.
	3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement. [Tony Cunningham.]
	 Question agreed to

Orders of the Day

Civil Aviation Bill

Lords amendments considered.

Clause 1
	  
	Aerodrome charges: noise and emissions

Lords amendment: No. 1.

Derek Twigg: I beg to move, That this House disagrees with the Lords in the said amendment.

Mr. Speaker: With this it will be convenient to consider Lords amendment No. 2 and the Government motion to disagree thereto, Lords amendment No. 3, and Lords amendment No. 4 and the Government motion to disagree thereto.

Derek Twigg: Lords amendment No. 1 was made by the Lords in the belief that aerodrome operators would not voluntarily make use of the provisions in the Bill to fix their charges by reference to the noise or emissions of aircraft. The Government take a different view. The power to charge by reference to noise has been available to airports since 1982 and many of the larger airports already use it, such as Heathrow, Gatwick, Stansted, Aberdeen and Edinburgh. The provisions of the Bill have been brought forward to provide clear powers for airports to fix their charges by reference to aircraft emissions as well as aircraft noise. I am confident that airports will, again, make use of these provisions when appropriate, with no need for compulsion from the Government.
	The Government's policy for many yearsnot solely under the current Administrationhas been that the local issue of the environmental impact of an airport should be resolved locally whenever possible. That policy reflects the diverse nature of airports and their operations. There are more than 140 licensed aerodromes in the United Kingdom to which the provisions of clause 1 will apply. They range from the busiest international airport in the worldHeathrowto airports with only a handful of flights a day.
	Lords amendment No. 1, which would place an absolute duty upon airport operators to fix their charges with reference to the noise or emissions of aircraft, would run the risk of placing an undue regulatory burden on some airports, especially small airports. Not all airports are located or used in such a way that nuisance is caused to others. It will not always be appropriate to charge by reference to noise, for instance if the airport is used by only one class of aircraft causing comparable amounts of noise.

Julian Brazier: I am grateful to the Minister for giving way so early in his speech, but astonished by what he has just said. He talks about an airport that is used by only one class of aircraft, but surely one of the reasons for giving the powers is so that airports can encourage operators to use more noise-efficient and emission-efficient aircraft in the longer term.

Derek Twigg: I was trying to make a comparison between larger and smaller airports and different classes of aircraft. Of course, we want airports to encourage the use of quieter aircraft. More modern aircraft are quieter than others.
	Clause 1, as it stands, allows the flexibility to account for the cases that I outlined, just as it will allow larger airports, such as Heathrow or Manchester, to reflect in their charging schemes the environmental impact of the aircraft that use them. However, I understand that hon. Members may be worried that some airport operators might not wish to take up the powers, even if local circumstances meant there was a strong case for doing so. Proposed new subsection (4) of section 38 of the Civil Aviation Act 1982, which is contained in clause 1, gives the Secretary of State the power to direct, by order subject to the negative procedure, specified aerodromes to make use of the powers in the clause. That provision might be used in cases when the voluntary measures prove ineffective.

Edward Garnier: I note that proposed new subsection (3) of section 38 of the 1982 Act refers to taking off or landing. The noise or emissions requirements are thus concerned with aircraft taking off or landing at the aerodrome in question. Will the Minister tell me whether the expressions taking off and landing are defined anywhere in the Bill? For example, would they cover aeroplanes that were coming in to land, but some miles away from the airportI am thinking of aircraft flying over my constituents as they come into Nottingham East Midlands airportor aircraft that take off from Nottingham East Midlands airport and then climb into the skies above my constituents?

Derek Twigg: I do not think that that is the case, but I will confirm the correct position to the hon. and learned Gentleman.
	I hope that my explanation of the Government's thinking behind making the provision a power, rather than a duty, will convince hon. Members to disagree with the Lords in Lords amendment No. 1.
	Lords amendments Nos. 2 and 4 would affect the way in which the charges should be set. Although the Government agree that it is reasonable that airport operators should be expected to set noise charges that are proportionate, we do not agree that that is something that needs to be provided for in the Bill. Airports have been making use of the power to set noise-related charges for more than 20 years and there has been no suggestion that they have not done so in an appropriate or proportionate way. However, if there is a problem with the charging scheme, the Secretary of State will have the power that I mentioned to direct an airport operator regarding the manner in which its charges are to be fixed. The airport should be subject to the control scheme that it sets up to address the effects of its operations on the locality. There areother considerations on airport charging, such as international guidance that noise-related charges should be non-discriminatory between users and should not be established at levels that are prohibitively high for the operation of certain aircraft. Again, we did not think it necessary to make those considerations statutory requirements. The existing provisions function well, and they do not need to be altered in any way.
	Lords amendment No. 3 is a minor technical amendment to clarify the provisions of clause 1, which inserts a new section 38 into the 1982 Act. New subsection (3) defines noise and emissions requirements. The amendment simply ensures that cross-reference is made to mention of those requirements in both subsections (1)(d) and (2)(d), rather than solely to subsection (1)(d).

Edward Garnier: rose

Derek Twigg: I am about to conclude, I am afraid. I urge hon. Members to accept Lords amendment No. 3.

Julian Brazier: May I begin by welcoming the Under-Secretary of State for Transport, the hon. Member for Halton (Derek Twigg) to the Chamber and, indeed, the hon. Member for Lincoln (Gillian Merron)? I look forward to our exchanges across the Dispatch Box, although I do not know how many there will be, because few people think that the noise of 1,000 soundbites has settled anything for long.
	Lords amendment No. 1, which the Government seek to overturn, replaces the word, shall, with may in the provisions on charging on noise and emissions. As the Minister explained, Lords amendment No. 2 makes those charges proportionate to the noise made. The remaining Lords amendments are relatively minor amendments on noise. There is all the difference in the world between the compulsion expressed in the word, shall, and the vague non-committal aspiration in may. This is an almost completely empty Bill, and in tabling those amendments the House of Lords sought to tweak the Government's tail so that they would do something about the problem. The amendments try to tease out an explanation from the Government as to whether the Bill will, in fact, do something or is just another eye-catching initiative.
	The Government recently admitted that their domestic target of reducing emissions by 20 per cent. by 2010 will not be reached. The Conservative Government cut emissions of carbon dioxide by 7 per cent. in their last seven years in office, but CO2 emissions are higher now than they were nine years ago. Aviation on its own explains why they have risen since the Government came to power.  [ Interruption. ] My right hon. Friend the Member for Wokingham (Mr. Redwood) has pointed to another possible source of rising emissions. The Bill, however, does not include any targets, sliding scales, rewards for airlines and airports for successfully tackling noise and emissions, or measures of success. Indeed, there is not even an obligation to measure, let alone report, progress or success. Above all, there is no compulsion at any point. In Committee, the hon. Member for Regent's Park and Kensington, North (Ms Buck), who then had ministerial responsibility for aviation, said that
	the provisions in the Bill have been introduced specifically in response to some airportsI name Manchester airport in particularthat have made it clear that they seek legal clarification of the powers that they wish to use. Manchester airport may want to fix its charges by reference to aircraft noise or emissions, and it seeks the cover of legislation to do so.
	The Bill therefore aims to close a legal gap identified by Manchester airport's lawyers.
	Clause 1, the main clause of the Bill, does not require anyone to do anything, but BAA has already introduced emissions charging schemes which it negotiated with the Civil Aviation Authority two years ago, and the Minister admitted that some airports have operated arrangements relating to noise for 20 years, so what are the Government introducing the measure for? Without an amendment requiring a degree of compulsion, as Lords amendment No. 1 does, the Bill does nothing, except remove the noise gap, which we will debate when we reach the next group of amendments.
	The Government should not preach environmental concern, then waste a golden opportunity to do something about it. It is clear that the Government are not sure what the Bill is about. I feel for the hon. Member for Halton, who has had it dumped in his lap towards the end of its course. From the way that he delivered his speech, I suspect that he, too, is not certain what the Bill is for, and that is not an attack on the hon. Gentleman. He did not draft his speech and had nothing to do with the Bill's origins.
	In Committee I said to the hon. Gentleman's predecessor, the hon. Member for Regent's Park and Kensington, North (Ms Buck):
	Surely one of the purposes of an emissions-related charging scheme would be to encourage operators to use aircraft which emit less emissions and noise at that aerodrome. I simply do not follow her logic on that.[ Official Report, Standing Committee B,5 July 2005; c. 6-7, 28.]
	The Minister chose to raise again today the idea that smaller airports will have only one class of aircraft operating from them. Surely the provisions should encourage airports to provide incentives for their operators to use aircraft that are quieter and which produce less NO2 and less CO2 emissions. The Government are uncertain what they are trying to achieve.
	In December 2003 the Government produced a White Paper on the future of aviation in the UK. Summarising the purposes of the White Paper, the then Secretary of State said that
	we have to balance those benefits against the serious environmental impact of air travel, particularly the growing contribution of aircraft emissions to climate change, and the significant impact that airports can have on those living nearby. That is why the Government remain committed to ensuring that, over time, aviation meets the external costs
	by which he meant environmental costs
	that it imposes.[ Official Report, 16 December 2003; Vol. 415, c. 1434.]
	In Committee the Minister said:
	There is no question that aviation has an impact in environmental terms, and we need to rise to the challenge that it presents. Those living close to airports have genuine anxieties, which the Government and I recognise absolutely and we must move forward in responding to it.

John Redwood: My hon. Friend has been following these matters with previous Ministers. Can he tell me what the Government are doing to try and get emissions and noise down? Most of my constituents would like something to happen on those counts.

Julian Brazier: I would dearly love to be able to answer my right hon. Friend's question, but the answer is very little. I hope I have made it clear that clause 1, which the amendment seeks to beef up, offers nothing in its present form. It gives airports powers that they have been using for years.
	The Environmental Audit Committee described Ministers as being superficial and vague about the environmental damage and the Government's unwillingness to tackle it. In Committee the hon. Member for Southport (John Pugh), speaking for the Liberal Democrats, pointed out that
	the Bill seems to allow even quite a large airport to have no scheme at all. Although there might be a case for some small airports that have very little traffic or very little international traffic not having a scheme, there is surely a good case for all big airports having some sort of scheme, but the Bill simply does not require that.[ Official Report, Standing Committee B, 5 July 2005; c. 6, 8.]
	I see no reason why any airport should not operate a scheme, but the priority is obviously the bigger ones. The Minister responded by stating that the proposed new section of the Act in clause 1 gives the Secretary of State power to direct specified aerodromes to use the powers in the clause, yet not once has the Minister said when that will happen. It is not reassuring. For example, what is to stop an airport operator with multiple operators using, under the guise of environmentalism, emissions and noise charges at one airport to provide a hidden subsidy to subsidise another in its portfolio by offering lower charges?
	We are opposed to cross-subsidy. For example, we know from extensive meetings within the airline industry that there is great unease about Stansted being the site for the next runway in the south-east.

Gwyneth Dunwoody: Has the hon. Gentleman noticed that it is usually the case that the bigger the airport, particularly if it is a designated airport, the lower the costs? Some of us think that it would be a good idea to spread around the United Kingdom some of the flights that currently go into the cheaper, larger, noisier airports. Is that his view, or is he suggesting that we should not undercut the financial viability of airports such as Heathrow?

Julian Brazier: I agree with the hon. Lady on that point, but I am concerned about cross-subsidy between airports in the south-east, which, as she knows, is the big issue. The key point about the new runway at Stansted concerns cross-subsidy, and, in theory, the new power for the Secretary of State could be used to encourage further cross-subsidywe already have a differential charging system. In practice, however, the Government have not pledged to use that limited power. The real issue is that clause 1 does so little, which means that the Government, who are committed to tackling emissions and noise, are doing almost nothing in this Bill.
	My final point often comes up either on Report or in Lords amendments. The Government have made it clear that there are technical defects in the wording of the amendments. Indeed, House of Lords  Hansard makes it clear that the drafter of the amendments knew that there were technical defects in the wording, which is why I shall not seek to press the matter to a vote. The amendments were tabled out of sheer frustration in the Lords, where there were no more answers on what the Government will do about environmental problems than we have received in this House. They seek to introduce an element of compulsion into clause 1, and when the Minister winds up the debate, I hope that he will indicate what the Government are actually going to do on noise around our airports and on emissions of oxides of nitrogen and of CO2.

John McDonnell: I welcome my hon. Friends the Members for Halton (Derek Twigg) and for Lincoln (Gillian Merron) to the Front Bench and to their new responsibilities. They deserved promotion, although they have been passed a poisoned chalice.
	In the past few months, the political parties have vied with one other to prove their green credentials. I am pleased that this Bill has appeared so soon, because one does not need to sledge across the Arctic while looking up the tails of half a dozen huskies or convene a summit of world leaders to identify an environmental issue, when there is one within 13 miles of this House, namely the impact of Heathrow airport in terms of noise and emissions. What worries me about the Government's failure to accept the Lords amendment and the Minister's failure to elaborate how the Government's system would operate effectively is that nothing is being done on tackling noise emissions and NO2 emissions.
	I hoped that even if the Government were not to accept the amendment, they would explain how they would subsequently designate aerodromes which are not complying with a basic standard of emissions control, but we have received no information on that point. That is why the debates in the other place and in this place have moved further towards compulsion than some would have liked. It is often said that we have reached the stage with the aviation industry that we reached on the control of emissions from cars 30 years ago, when we had a long debate, which led us to incentivise research and development on improvements to engines and overall design and to control the usage of cars through either vehicle taxation levies or fuel duties. That is exactly where the amendment stands with regard to aviation.
	We thought that there would be an opportunity to introduce legislation that placed a duty on aerodromes and then enabled them to adjust their charging policies if necessary. That would incentivise the aviation industry to reduce emissions by way of research and development, better engine design and improved flight practices. It would not only encourage good practice in the industry overall but incentivise individual companies by not placing a duty on them. The vague power that the Secretary of State will have, with no clarification of how it will be exercised, lets them off the hook. That means that we will progress no further and that areas will still be blighted by emissions from the aviation industry. From my own perspective, this proves that yet again the aviation industry has dominated the policy-making network that surrounds the Department for Transport, while the voices of environmentalists and of constituents who are suffering as a result of these emissions have not been heard.
	It has been argued that the Secretary of State would be able to intervene at a future date. However, it would be invaluable if we could have a description of sorts as to how he would do so. What criteria would beused? How could representations be made to the Government to ensure that that mechanism was exercised by Ministers? What representations could be made by local communities? What would be the forum in which they would make those representations? What would be the role of individual MPs representing their constituents? At what stage would the consultation take place? How will these matters be brought before the House? At the moment, they are subject to the negative procedure, so there will be no opportunity for Members to trigger debate or even to comment on any decision that is made by the Government.
	I am afraid that I fully support the Lords in this amendment, because compulsion is the only way forward, not only to bring the industry to a realistic assessment of the impact that it is having on our environment, but to force it to take some action. Without compulsion, we will go on for decades without having a real and direct impact. As a representative of the constituency in which Heathrow is sited, I am aware that even with existing legislation and voluntary agreements, my constituents' quality of life is directly affected by the noise and emissions that pollute the atmosphere. It was recently estimated that 5,000 of my constituents are being poisoned by air pollution from the airport.
	The existing system is not working. The amendment would introduce an element of compulsion and put some pressure on the industry, and we would be able to move forward in a consensual way, since every party wants to be the greenest party in the land at the moment. I ask the Minister at least to describe how he envisages that the system will work and have an effect in the absence of the amendment.

Alistair Carmichael: I, too, welcome the Under-Secretaries to their new responsibilities. I have previously worked with them both in different roles. I am sure that our working together will be as fruitful in this role as it has been in the past.
	Having said that, I am afraid that I do not have much positive to say about the Government's view on noise and emissions. They have talked a tough game, but their proposals in the Bill are timid, to say the least. The amendments made in the other place would go a long way towards putting spine into these measures, and they are exceptionally to be welcomed. I regret the fact that the Government are asking this House to disagree to them.
	The mechanism of compulsion, for which the amendment provides, appears to be the only means whereby we can hope to achieve the sort of consistency that will be necessary to attain the meaningful controls that are needed on noise.

John Redwood: What do the Liberal Democrats believe to be the minimum charge that one would have to impose on aircraft landing and taking off to make an impact on the problem that the hon. Gentleman identifies?

Alistair Carmichael: I am delighted to tell the right hon. Gentleman that I have no idea what the figure would be. As Ministers normally say in such circumstances, I shall make inquiries and write to him. However, the point is that, instead of setting a figure, we are considering establishing a structure.
	When my noble Friend Lord Bradshaw moved the amendment on Report in the other place, he drew attention to the position that persists in Birmingham and Coventry airports. He explained that Birmingham has exceptionally good noise monitoring arrangements, which are vigorously enforced and benefit the nearby residents. On the other hand, Coventry, which shares the same airspace, has no such noise monitoring in place. Consequently, the older, noisier, principally freight-based aircraft use Coventry airport because it is not subject to the same controls. By resisting the amendment, the Government appear to be inviting us to visit that position on the rest of the country.
	Lords amendment No. 2 proposes that the charges on noise should be proportional to the noise emitted. I cannot understand why the Government continueto resist that. It is a no-brainer. In the other place, Lord Davies of Oldham prayed in aid smaller airports and the regulatory burden that would be visited on them. He specifically mentioned Tiree airport. I am delighted that, at last, the so-called peripheral communities are getting their fair share of say in Government policy on the matter, but I do not believe that working out the charges for noise and emissions at Tiree airport would be especially onerous. It would take most people approximately five minutes. I know from the operation of flight information services at Tingwall airport in Shetland in my constituency that the Government have previously showed precious little regard for the regulatory burden on small aircraft and, frankly, small airports have more pressing concerns than what we are discussing.

Lembit �pik: Does my hon. Friend agree that the smaller airports are something of a red herring because it is obvious to one and all, including, I am sure, the Under-Secretary, that general aviation and general business aviation involving smaller aircraft, of, for example, five tonnes, do not cause the emissions and the noise about which he is concerned? He does not need to worry about them. He could discuss the points that my hon. Friend makes without threat to the small airports.

Alistair Carmichael: My hon. Friend is uncharacteristically restrained when he says something of a red herring, because the matter is a total red herring. It shows the general weakness of the Government's case that they resort to producing such examples in support of their arguments. I do not understand why they are so resistant to fairly simple, straightforward commonsense measures, which could make a genuine difference to the people who live near the major airports, especially those in the south-east of England whose lives are blighted by noise. The Government have a chance to act. The Under-Secretary must tell us why he chooses not to take it.

Kelvin Hopkins: I shall speak briefly. I should declare an interest because London Luton airport brings considerable benefits to my constituency through employment and payments to the local authority, which contribute to local spending. The environmental effects do not affect my constituency so I could say that I do not mind what the impact is because I get all the benefits and none of the difficulties. However, that would be irresponsible and selfish.
	I have spoken in favour of expanding London Luton airport, but largely on the basis that it might obviate the need to expand Heathrow. If Luton airport could be expanded, some medium-haul and short-haul flights could be transferred from Heathrow, which would benefit us and the constituents of my hon. Friend the Member for Hayes and Harlington (John McDonnell).
	I am disappointed that the Government have chosen to reject the Lords amendments, although I shall acquiesce in their decision. Is it not time that we started to incentivise airport operators and others in the aviation industry to get their act together?

Graham Stringer: My hon. Friend and I have shared a similar point of view in many aviation debates. Does he accept, however, that the debate on this amendment lacks contextnamely, that the noise contours around almost every airport are getting smaller, and that the noxious emissions from aircraft are reducing?

Kelvin Hopkins: I agree entirely; I simply want to offer the industry incentives to do better.

John McDonnell: Emissions might be decreasing where airports are not expanding. However, where airports are expanding, the increase in emissions is having a much greater impact.

Kelvin Hopkins: Indeed. Anyone who lives near an airport will suffer in that respect, and there is everything to be gained from making it as difficult as possible for the industry to spew out noxious emissions.

Julian Brazier: Will the hon. Gentleman clarify his response to the previous intervention? Not only are the aggregate CO2 emissions from aviation rising fast, as flight numbers rise much faster than the rate at which efficiency improves, but that rise has more than accounted for the rise in CO2 emissions that is one of the sadder achievements of the past nine years of this Government.

Kelvin Hopkins: I thank the hon. Gentleman for his intervention. I wanted to respond to the intervention made by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). She mentioned the distribution effects of charges relating to emissions and noise. I welcome the Under-Secretary of State for Transport, my hon. Friend the Member for Halton (Derek Twigg) to his place. Has he looked at the impact of distributing traffic between airports? Such a distribution could have a significant impact on south-east England, especially on London Luton. I hope that traffic will shift from London Heathrow to London Luton, as that would benefit Luton and Heathrow. We know that there will be an increase in air traffic, although I think that it will be smaller than is being predicted, for all sorts of environmental and political reasons. Nevertheless, such a shift would be beneficial. Has the Department considered the distribution effects of such constraints on noise and emissions?
	My hon. Friend the Member for Manchester, Blackley (Graham Stringer) mentioned noise footprints. A new generation of aircraft will soon come into existence. Some hon. Members might have seen the presentation on the so-called Dreamliner, which is made of composite rather than metal. It is much lighter, has a bigger payload and can fly much longer distances. Most significantly, however, it is much more fuel- efficient and has a much smaller noise footprint. If we can offer the industry incentives to move as quickly as possible towards adopting such aircraftwhich I believe are the futurewe shall do everyone a great service in regard to the environment. It would also make life easier for the industry, as it would be less under pressure than it would otherwise be.
	We should also press what is left of the British aircraft manufacturing industrythere is not too much left, but what is left is Airbusto go in that direction as well. It should follow Boeing in making aircraft that are much more fuel-efficient and generate far fewer emissions and less noise.
	Having made those few remarks, I shall acquiesce in what the Government decide on this amendment.

Edward Garnier: I am sorry that the hon. Member for Luton, North (Kelvin Hopkins) will acquiesce with what his Whips require. He is missing a point. The clause will do nothing to protect the interests of his constituentswhether they live right under the flight path or gain from the economic advantages that Luton airport brings them. None of us wants the economy to be damaged, but equally I think that all of us, including Labour Members, want the airline, aviation and airport industries to consider the interests and lives of those who live under flight paths and near airports.
	I was interested to learn quite recently that 86 per cent. of all noise complaints about arriving aircraft relate to Heathrow or to Nottingham East Midlands airport. Heathrow is the country's premier airport for passengers and freight. Nottingham East Midlands airport is not covered by clause 2 because it is not a designated airport under the Civil Aviation Act 1982. My constituents do not liveto use the words of clause 1in the vicinity of Nottingham East Midlands airport, which is not in Nottingham. Very few people from outside Britain know what the east midlands is like as a destination, and the airport is wholly within Leicestershire but happens to have a Derbyshire postcode, and I see the hon. Member for South Derbyshire (Mr. Todd) in his place. I also see the hon. Member for Manchester, Blackley (Graham Stringer) in his place, and he is a former director of the Manchester Airport Group, which wholly owns the airport. We have the absurd situation in which more and more people are getting more and more cross with the way in which Nottingham East Midlands behaves towards its neighbours, but they can do less and less about it.
	I thought that the new Civil Aviation Bill would give my constituents and the residents of greater Leicestershire some purchase on the decision making of an airport whose headquarters are in Manchester. That would have improved the quality of life of my constituents who live between 20 miles and 50 miles from the airport.

Kelvin Hopkins: The hon. and learned Gentleman seems to making a case for the municipalisation of all airports so that they are democratically owned and controlled by the people who live in their area.

Edward Garnier: Not only was I not seeming to make that case, but I was not making it. I am asking the Government to get a grip and to understand the damage that, on the face of it, a beneficial operation could wittingly or unwittingly have on those who have least control over the operation.
	Nottingham East Midlands airport might have much to recommend it. It sells itself as the freight hub of the east midlands and as a good place to do business from which freight carriers can distribute goods throughout England within four hours of their being landed. That is fine, and we are told how wonderful it will be that new jobs will be created in the Castle Donington area. However, we have no evidence of those jobs; they are simply assertions.
	Furthermore, as a direct consequence of an increase in traffic aeroplanes will, over the next decade, land once every 90 seconds between 11 pm and 7 amthat is the aim and the way in which the airport is being soldbut we are never told that, because the airport is not designated under the 1982 Act, the Government and the Secretary of State can do nothing about it. The Bill does not address that point and, despite their warm words about wanting to be green, Ministers will do nothing to control aircraft movements. If people think that the Government are going to do something about that, they are sadly wrong because they want to have may instead of shall, and I think that the constituents of the hon. Member for Hayes and Harlington (John McDonnell) will suffer as much as my constituents do. The only hope that my constituents who are affected by a non-designated airport have is that the management of the airport group, based in Manchester, would at least be compelled to enter into a regime to control the noise and air pollution aspects of the business.

Mark Todd: Although I have a lot of sympathy with the hon. and learned Gentleman's point, does he agree that the clause does not suggest a way to achieve what he wants to achieve? It focuses essentially on a charging regime rather than a means of stopping certain aircraft using airspace over his constituency.

Edward Garnier: The hon. Gentleman makes a different but none the less good argument. I am arguing that the Bill, unamended, with the word may, does nothing to protect my constituents or his constituents in villages such as Melbourne and those areas that are under or near the flight path. To pick up on his argument, although Nottingham East Midlands airportManchester Airport Groupwould be compelled under the Lords amendment to enter into arrangements that set up an effective charging regime, there is no template or scheme, designed by the Civil Aviation Authority, the Manchester Airport Group or, still less, the Secretary of State for Transport, to show an errant airport, lazy airport or uncaring airport, if one can have such a description of an inanimate object, how to treat its neighbours. The word shall could compel them to enter into a regime that creates a charging system, but which sets the charges at a ridiculously low level. My fear is that if we privatise the policing system so that an airport is enabled to set its own charging regime to fine its own customers, we are whistling in the windif it were possible to hear oneself whistle.
	Nottingham East Midlands airport has gone on record as saying, We want to attract lots and lots of aeroplanes all through the night because we want to sell ourselves as the freight hub of the midlands.

Graham Stringer: rose

Edward Garnier: I see that the former director would like to intervene.

Graham Stringer: As ever, I am listening carefully to the hon. and learned Gentleman's argument, which seems to be based on the fact that there is a problem because Nottingham East Midlands airport is second in the pecking order when it comes to the number of complaints. Where would it come in the pecking order if the number of complainants were listed? Is not it the case that most of the complaints about the airport come from a very small number of people?

Edward Garnier: I am not sure that that is true. It may well be that from the safety of Manchester, Blackley, the number of those who complain about the noise that affects the residents of Leicestershire is small beer.

Keith Vaz: rose

Edward Garnier: I will allow the hon. Gentleman to intervene briefly, before putting a point to the Minister and concluding.

Keith Vaz: The hon. and learned Gentleman is right: there is great concern in Leicester and Leicestershire about the expansion of Nottingham East Midlands airport. Perhaps people do not write in as much as they do in Manchester, but the problem has always been that the airport has failed to consult local people about its plans. We have been able to discover what it is doing about night flights only because of the work done by the hon. and learned Gentleman and others to expose the airport's management in the House.

Edward Garnier: As ever, I am grateful for any compliments from wherever they come. On such a subject, to have a compliment from the hon. Gentleman is welcome. He is right, although I confess that the airport has got better in its public relations. Indeed, as a result of the things that I and others have said over the past few years, it has had to appoint a public relations officer. It so happens that it has appointed the man from Birmingham International airport, who seems to send out exactly the same press releases, except that he chisels out Birmingham International and puts Nottingham East Midlands instead, so we get the same guff. There we are; that is what public relations is, I guess.
	The hon. Member for Leicester, East (Keith Vaz) is perfectly correct: there have been lots of justified complaints, not just from the vicinity of the airportthe word used in the clausebut from further away. Those of us who live further from the airport cannot have any confidence in the Bill dealing with the problem. Subsection (2)(c) refers to
	controlling the level of noise or atmospheric pollution in or in the vicinity of the aerodrome so far as attributable to aircraft taking off or landing.
	That does not help the people living in Market Harborough or the villages and hamlets between Market Harborough and the city of Leicester, as aircraft come in or out of the airport and bend round the north of the city.
	One does not have to live near a big airport such as Heathrow to understand what it is like. Noise is a relative, not absolute, concept. If an area that has traditionally had no ambient noise at nightrural Leicestershireis to be faced with aeroplanes and freighters coming in every 90 seconds, that presents a completely different problem from the one of which the Minister is perhaps aware.
	I shall use an analogy that I have used previously. If Nottingham East Midlands airport were a lorry freight company that wished to drive trucks through my villages every 90 seconds all night, somebody would do something about it. As the freight is up in the air, however, nobody does anything about it, and the Government will not take responsibility for the implications and consequences of their policy, through the White Paper, of creating this great freight hub in north-west Leicestershire. Were a factory emitting noxious fumes all night, somebody would do something about it, but the Government say that it is nothing to do with them, that they simply set the policy in the White Paper and that what happens next is down to local decision making. There is no local decision making of any value, because the Government will not give the local population any power over shareholders in Greater Manchesterthe 10 local authorities that own the airport.
	What do we do? I make the same speech week after week. I drive the Speaker of the House mad with the ingenious ways in which I try to ask questions about Nottingham East Midlands airport that, strictly, are probably out of order, but he is a tolerant man and I thank him for it. While he may be tolerant, however, my constituents are becoming increasingly intolerant of the way in which their lives are being ruined by the bad behaviour of the Manchester Airport Group and the way in which it addresses the issue.
	The worst that could be done is for the Government feebly to say that Nottingham East Midlands airport may fix its charges in respect of an aircraft. They should say shall, and a meaningful regime should be attached to make sure that, if the Government are prepared to allow Nottingham East Midlands airport to police its own activities, it does so in a sensible way that bites. The people who get the benefit should therefore also have to pay for the benefits that create burdens for my constituents. Unlike the constituents of the hon. Member for Luton, North (Kelvin Hopkins), my constituents get all the burden or disbenefit and none of the economic advantage.
	It is high time that the Government took a grip. I appreciate that the Minister took over the aviation responsibility at a difficult time, but I have now watched half a dozen aviation Ministers push the problem into the wastepaper basket and hope that Manchester Airport Group will behave itself. It will not. It is therefore time that the Government paid a little attention to the people of this country before they finally fade away.

Alan Simpson: I also congratulate my hon. Friend on the expansion of his ministerial remit. I hope that the additional duties do not get in the way of his approval of lines 2 and 3 of the Nottingham tram submission, which has been waiting for permission to land for quite a long time.
	Not too long ago, the Prime Minister spoke at a press conference in New Zealand about climate change. He made the point that every aspect of Government policyevery aspect of governmentwould now be imbued with a duty to address the challenge of climate change. Yet when we have a chance to deal with one of the biggest contributors to climate changeaviation fuelwe have a sense that the Government have avoided the opportunity to intervene and place duties on the industry as a whole.
	I ask the Minister to think again about the nature of the Lords amendments. I too could claim to have a particular interest in what is a local issue affecting Nottingham East Midlands airport, but in fact my concerns are wider. I do not want to diminish the legitimate complaints made by people who are directly affected by noise, but for me the significance of the amendments lies in the fact that they bolt emissions to noise. That is of enormous and crucial interest, not just to those who live in the immediate vicinity of airports but to everyone who lives in this country.
	The fact is that permissive powers are largely ineffective and irrelevant when it comes to tackling the major issues that we face as a society. We know that from our experience of the issues of fuel poverty and housing. For years we said that the major energy suppliers had existing powers to intervene if they wished to eradicate fuel poverty. Many did something, but only at the most nominal level. When the major suppliers were asked why they did not go further, they said It is a mug's game. Why should anyone take on the additional costs of serious measures to eradicate fuel poverty when our competitors will undercut us in what is essentially a price-only market?
	Exactly the same now applies to aviation. Drawing a distinction between designated and non-designated airports and giving their managements a permissive entitlement will still leave them operating in, essentially, a price-only market. It is highly unlikely that any airport will take on major initiatives that would cut the carbon emissions that are associated with an expansion of airport activity.
	Furthermore, we could find ourselves in a perverse situationa lose-lose scenarioin which a relatively small reduction in noise impact had the effect of doubling the number of planes allowed to land during the period concerned. That would not mean that those living in the flight paths benefited from a better, less interrupted night's sleep, but it would mean a doubling of carbon emissions.

Justine Greening: The situation that the hon. Gentleman describes is not hypothetical. That is exactly what is being proposed in stage 2 of the night flights restriction consultation relating to Heathrow, Stansted and Gatwick.

Alan Simpson: Precisely. I did not want to speak at this stage about the next group of amendments, which refer specifically to schemes that will be in place, but that is where we are heading. It is not only possible but highly likely that the consequence of the proposals will be at least a doubling of night flights and the carbon emissions associated with them, and that we shall find ourselves in a perverse position. Climate change is at the heart of everything that we do as a Government, but we are proposing to take a step that will make our contributions to climate change-related damage worse.
	A sensible piece of advice is the first law of holes: when we are in one, we should stop digging. That is the first stage in working out how to get out of the hole.

John Redwood: The hon. Gentleman can see the problem very clearly, as can I and many of my right hon. and hon. Friends. How many of his right hon. and hon. Friends will join us in trying to sort it out?

Alan Simpson: I suspect that there is a broad consensus in all parts of the House on the need to sort out the problem, but I am not sure whether the right hon. Gentleman's Front-Bench colleagues propose to divide on this amendment to test that consensus.
	This is one of the most critical challenges that our society faces. When Sir David King, the Government's chief scientific adviser, gave evidence to the Environment, Food and Rural Affairs Committee, he said that climate change is a bigger threat to our survival than terrorism. We have to address the damage that the doubling or trebling of carbon emissions, resulting from the expansion of freight and passenger air transport, will do to the environment that we hand on to our children.

Julian Brazier: On the hon. Gentleman's earlier point, although we are strongly in favour of the amendment's substance, we will not press it to a vote because, as I made clear in my speech, as drafted it would impose an unreasonable burden on some smaller airports. Indeed, its mover in the Lords made it clear that the wording was defective. We are with him in spirit, but it is the next group of amendments that we will press to a vote.

Alan Simpson: I would rather have an amendment with defective wording than no amendment at all. As was pointed out earlier, the Bill provides an imperfect way of addressing a very serious problem: it relies on using a market mechanism to address a colossal environmental challenge. I would rather that the Government set very strict limits on the carbon emission entitlements of all airports, making it clear that they are not allowed to pass that threshold. However, the Bill contains no such provision.
	Removing the distinction between designated and non-designated airports would have the great advantage of generating an argument within the industry. The industry would say to the Government, If we are suddenly to have a duty to charge on the basis of emissions and noise, there has to be a coherent framework. So give us the frameworkgive us the new level playing field. In that sense, a regulation based on an amendment with defective wording would take us closer to achieving a level environmental playing field than no regulation at all. My worry, given the aviation industry's current framework, is that establishing a permissive entitlement could actually double or treble the amount of environmental damage, rather than achieve a status quo.
	I urge the Minister to think again about closing this particular door. Nothing in our history or our current activity suggests that we can rein in the impact of climate change and the damage being done to the environment without establishing a clear framework that everyone has to operate within. To leave it to permission is to leave it to those who will exploit the most and do the least.

Lembit �pik: I rise to seek the Government's position on general aviation, particularly British general aviation, regarding noise and emissions. In doing so, I welcome the Minister to his new role; I am sure that the general aviation sector is looking forward to making direct connections with him.
	I fly aircraft, but they are little ones that do not make much noise or use much petrol. My Mooney M20J can travel at 190 mph and do 24 miles per gallon, which is perhaps better than the Minister's own road vehiclecan do. Like me, the hon. Member for Aldershot(Mr. Howarth) also flies regularly. The Minister should know that we have created a loosely constituted groupthe parliamentary aviation groupthat focuses on the interests of general aviation and of business general aviation. It is clear to us that general aviation and business general aviation are not the significant problem in terms of noise and emissions. The Minister may already know that general aviation is a 5,000 million a year sector of the British economy and provides some 21,000 jobs. While it is therefore big in business terms, it is small in terms of the impact that we are discussing.
	General aviation's total daily environmental impact is roughly the same as that of one jumbo jet in the first five hours of a transatlantic flight. Indeed, the entire fuel usage of the piston sector of general aviation is equivalent to roughly 20 minutes of usage by the road transport sector. It is also rare for general aviation, or the smaller business jets, to cause complaints about noise. While most of the large jets carry predominantly leisure passengers, most general aviation and small business jets carry business passengers, including Ministers and Opposition Members from time to time.
	Leaving aside the points about the amendments made by my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael), I hope that the Minister will confirm that it is not the Government's intention to create unintended consequences for the general aviation sector and the business aviation sector of aircraft that weigh less than 10 tonnes. I do not expect the Minister to spend much time on that issue, but I can inform him that the general aviation sector, which probably has not been organised or strategic enough in the past in developing links with his Department, is concerned that announcements intended to check noise and emissions from large jets actually punish the smaller aircraft that are not the problem. I hope that the Minister will also confirm that he is willing to continue to develop the relationships that his immediate predecessor was developing effectively, to ensure that general and business general aviation will be taken into consideration when legislation and amendmentssuch as those we are discussingare proposed. I am happy to work with him on an informal cross-party basis to ensure strategic consideration of that important economic sector, which does not cause the environmental and noise disturbances that so vex many people living near large airports.

Derek Twigg: We have had an interesting and enlightening debate for my first run-out on the subject of aviation and I appreciate that hon. Members have great interest in and concerns about it. As I said earlier, we disagree with the Lords amendments because they would impose an undue regulatory burden. It is probably best if local environmental impacts are resolved locally, because different issues arise at different airports, so a one-size-fits-all solution is not the proper approach.

Mark Todd: Can my hon. Friend explain why the apparent fault in placing an additional regulatory burden onpresumablysmaller airports could not be dealt with by clearer regulatory guidance from the Government after the passage of the Bill?

Derek Twigg: We have to make a judgment about the balance of the burden and what sort of guidance we issue to airports, and we believe that it is best dealt with locally, given that the impacts occur locally. It is important to look at the issue on a case-by-case basis. It is implicit in the Bill that the Secretary of State has powers to direct airports to use the powers that they have if they are not doing so. Through its provisions on charges on noise and emissions, the Bill will help to encourage awareness of the importance of the environmental aspects of airports. That will continue as concerns are raised and given a higher profile and airports take account of them.

Edward Garnier: The Minister talked about local decisions, an expression also used by his five or six predecessors, but the Bill refers to the vicinity. As I have already said, my constituents live between 20 and 50 miles away from the airport, so they feel that they are in the vicinity, but, as I understand it, they will not be included in any regime permitted under the clause. Can the Minister assure me that local decisions will not just mean, in the case of Nottingham East Midlands airport, North West Leicestershire district council but the whole local authority regime throughout the county of Leicestershire? Otherwise, the provision is meaningless.

Derek Twigg: It is important that airports listen to concerns raised by people affected by flights from them and we have seen good practice in many airports. I realise that the hon. and learned Gentleman is raising issues about the way things were dealt with in the past, but it is important that airports respond to such concerns. On his earlier question, I can tell him that although clause 1 relates to landing and taking-off charges in respect of certified noise levels, a definition of landing or taking off is not necessary for the purposes of the provision. I understand his point and I am sure that he will continue to make it, but there is a balance to be struck between the economic impacts and benefits and the social and environmental costs that he and others have outlined.
	The hon. Member for Canterbury (Mr. Brazier) drew attention to the environmental consequences. As he and the House are aware, international aviation emissions were not included in the Kyoto targets but the UK is leading the international debate and pressing for action. Under our EU presidency, we made progress on the inclusion of aviation in the EU emissions trading scheme and the European Commission has been remitted to produce a legislative proposal by the end of 2006. Current research places high priority on the importance of the impact on the environment, but we have to strike a balance between the economic impacts and the social and environmental effects.

John Redwood: If the Minister does not want to use the route suggested in the Lords amendment, is he telling the House that he can guarantee that a carbon trading system will affect aviation in the short term, so that emissions will be curbed, or is he saying that in practice the Government will do nothing to curb aviation emissions?

Derek Twigg: The right hon. Gentleman will have heard what I just said about the EU emissions trading scheme. We are leading discussions internationally about what can be done. We believe that such things should be dealt with locally, however, because different issues affect different airports, which is why we think it right to disagree with the Lords amendment.

Graham Stringer: I have been following my hon. Friend's argument closely and I agree that it is better for decisions to be made locally. Is not there a serious flaw in the case being put by Opposition Members? Even if landing charges were doubled or trebled, they would still be only a relatively trivial part of an airline's costs. It is most unlikely that such charges would change behaviour so is it not better to follow the direction proposed by the Government and look for international co-operation rather than trying to force charging regimes from the centre that could be inappropriate?

Derek Twigg: I thank my hon. Friend for his comments and recognise his experience, interest and work in aviation. He makes an important point. The Government believe strongly that our approach is correct and, as he says, local decision making is important when taking account of issues relating to the environmental impact of airports.

Alan Simpson: I am grateful to my hon. Friend for drawing the distinction between decisions that need to be made locally and those that come back to ministerial and Government level. I also welcome the Government's initiative in relation to EU-wide discussions. My difficulty lies in understanding where we will run the debate from. I do not want to put my hon. Friend on the spot on his first appearance at the Dispatch Box on aviation, but will he undertake to return to the House with whatever environmental impact assessments have been made about the projected growth of airport traffic and the carbon footprints that that will cause? Whatever discussions take place at European level, we must have some known parameters about the current carbon impact that we are talking about in the existing proposals, to put together not only a national approach but a European-wide one. So will he come back to the House to put that information before MPs, perhaps by placing it in the Library?

Derek Twigg: Again, I understand the issue that my hon. Friend raises. He mentions the European Commission and the emissions trading scheme, but we also have international discussions, which were mentioned a few moments ago by my hon. Friend the Member for Manchester, Blackley (Graham Stringer). Of course, we listen to the issues raised on the Floor of the House today.
	I want to move on quickly, because time is running on and hon. Members want to discuss other issues. The hon. Member for Orkney and Shetland (Mr. Carmichael), unless I misheard him, made a point about the noise monitoring system at Coventry airport. As I understand it, the recent planning approval to the interim passenger facility will lead to noise monitoring being provided under the terms of an agreement between the airport operator and the local planning authority. I should like to conclude on that.
	 Lords amendment disagreed to.
	 Lords amendment No. 2 disagreed to.
	 Lords amendment No. 3 agreed to.
	 Lords amendment No. 4 disagreed to.

Clause 2
	  
	Regulation by Secretary of State of noise and vibration from aircraft

Lords amendment: No. 5.

Derek Twigg: I beg to move, That this House disagrees with the Lords in the said amendment.

Madam Deputy Speaker: With this it will be convenient to discuss Lords amendment 11 and the Government motion to disagree and Government amendment (a) in lieu thereof.

Derek Twigg: Clause 2 amends section 78 of the Civil Aviation Act 1982, which enables the Secretary of State to take steps to limit or mitigate the effect of noise and vibration connected with the taking off or landing of aircraft at designated airports. The current legislationsection 78(3) of the 1982 Actrequires that the operating restrictions set for that purpose include a numerical limit on aircraft movements. At present, therefore, the night-flying restrictions at the designated airportscurrently Heathrow, Gatwick and Stanstedare based on both a numerical movements limit and a noise quota set for each summer and winter season. The noise quota is designed to encourage the use of quieter aircraft. In the White Paper, The Future of Air Transport, the Government said that we would amend the current legislation, so that operating restrictions could be set on a different basis in futurefor example, one more directly related to the noise nuisance caused. That is what clause 2 will achieve.

Joan Ruddock: May I put it to my hon. Friend that, although it would be ideal if all aircraft were much quieter, the concern that my constituents and those of other hon. Members have is that any interruption to a sleep pattern is a problem and therefore the number of flights matters seriously. He will know that many of us wish to have no night flights, but I hope that he will give us some comfort about how the Government seek to proceed, given that there are so many objections to flying at all at night.

Derek Twigg: I understand my hon. Friend's concerns. As she says, there is a view generally about not wanting night flights, but there is always a balance to be struck between the economic importance and the social and environmental issues. In a few moments, I will come to the specific issue that I know that she has an interest in.

Martin Linton: Although I agree with my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) that the best solution would be a complete ban on night flights, will the Minister confirm that the present combination of number limits and noise quota limits will continue until 2013 under the new regime that is about to be announced?

Derek Twigg: If my hon. Friend will bear with me, I will come to those issues.
	Lords amendment No. 5 removes subsection (2) of clause 2, which would enable a future Secretary of State to impose restrictions that limited cumulative amounts of noise caused by an aircraft using a designated airport. Such restrictions could apply without specifying a maximum number of movements. The restriction could, for example, take the form of noise quotas or a limiting noise contour area. The Secretary of State would not be prevented from continuing to set movement limits, but could consider alternativesfor instance, if they provided a more effective incentive to use quieter aircraft. Our intention is not to prevent future Governments from setting stringent controls on night flying at the airports, or from setting movement limits as part of those controls; it is simply to ensure that they have the power to set restrictions in the most effective way possible, whatever the future circumstances may be.

David Taylor: Does the Minister agree that the system is horrendously complex? So far, for instance, our Government have refused to designate East Midlands airport, which would benefit significantly from a regime of this kind. It would not be much of a consolation if the present limit of, say, 14 aircraft at a cap of 95 dB were to be replaced under a quota count system by 28 aircraft at 92 dB, which is approximately half the volume of noise. Why would the Government include the measure in legislation, linked to an assertion that they will not use it for the time being? There will always be that risk and that temptation.

Derek Twigg: I understand what my hon. Friend is saying, but it is important to have a number of tools at our disposal to deal with the issue of aircraft noise and the related environmental issues.
	It will be for a future Secretary of State to consider any changes to the basis on which night flying restrictions are set after October 2012, and, in doing so, to choose whether to make use of the more flexible provisions that we seek to bring in. Any changes that were proposed as a result would, of course, be subject to full public consultation in line with EU requirements and the eventual decisions would need to be reasonable.

Susan Kramer: Does the Minister not understand that saying, Trust me, is not a satisfactory answer to people in my constituency living under the Heathrow flight path? They have had past assurances on the expansion of Heathrow, but now face terminal 6 and runway 3, the potential for additional night flights and the loss of runway alternation. At least a hard cap number gives people some degree of certainty, which is what they are asking forif they have to live with night flights, which frankly every one of them would like to see gone.

Derek Twigg: The hon. Lady has made a point that other hon. Members have made, but clearly the Government have set out their thinking and their position on the tools to use to deal with the issues of noise, emissions and night flights.
	I am aware that there has been concern that the Government might use the amended provisions immediately to bring in a night flying restrictions regime at Heathrow, Gatwick and Stansted on a completely different basis from that on which we have consultedI am returning to the hon. Lady's point. We have been considering the responses to the consultation on night flying restrictions at Heathrow, Gatwick and Stansted airports and will announce our final conclusions by the end of the month. However, in order to remove the uncertainty on an element that has given rise to concerns, I have decided not to increase night time movement limits at Heathrow during the period 2006 to 2012.

John Redwood: I am extremely grateful to the Minister for that assurance, which will reassure my constituents. However, it leads us to ask why we should legislate for 2013 now when all sorts of things could happen in the intervening period. We could have had another couple of Prime Ministers by then and planes could become a lot quieter, so is it not rather premature to legislate so far in advance, which will, undoubtedly, worry people?

Derek Twigg: We can argue about whether people want us to legislate now, leave things open, or have more discretion, and that is part of the debate that we are having todayI am sure that it will continue. However, it is important to reiterate that we have decided not to increase the night-time movement limits at Heathrow between 2006 and 2012.
	Let me return to the point about consultation, trust and the way in which we can guarantee what future Governments will do. I mentioned the European Union requirements, but I can also tell the House that I cannot envisage a situation in which any Government would not consult on a change affecting the important issues of night flying or aircraft movements. There is already a track record on that. The fact is that there will be consultation.

Justine Greening: I fail to understand how the Minister's argument stacks up. Surely keeping two locks on the Secretary of State's ability to manage noiseone involving movements and the other involving what many of us would say is a fundamentally flawed noise quota systemis better than taking one away. Surely the Minister should leave the movements cap in place and perhaps allow a future Secretary of State to set it high enough that it would be ineffective. Why does he want to take it away altogether and remove a future Secretary of State's ability to use it to curb movements in and out of airports close to my constituency, such as Heathrow?

Derek Twigg: What we think is appropriate is a matter of balance. There is obviously a difference of opinion about the way in which we should go forward. However, the option and the way in which we have set it out gives us the best possible approach on the problem with which we are dealing.

Ann Keen: I thank the Minister and, especially, the Government for listening to my constituents. The concession that he has announced will be most welcome in Brentford and Isleworth and, indeed, the borough of Hounslow. A lot of people have written to me about the matter and we have held many meetings with the Department. I also thank the Minister for the assurance that there will be consultation on future changes.

Derek Twigg: My hon. Friends the Members for Brentford and Isleworth (Ann Keen), for Feltham and Heston (Alan Keen) and for Lewisham, Deptford (Joan Ruddock) have put forward their constituents' views vigorously and strongly, and we listened to what they had to say.

Susan Kramer: Does the Minister not understand that from the perspective of someone under the flight path, the number of flights is a completely different issue from how loud each aircraft is? His proposal essentially ditches the number of flights as an important measure. If people are woken during the night, it matters to them whether that happens twice or 10 times, and that is a serious problem for my constituents.

Derek Twigg: I do not accept that. It is important that we consider how we can manage the situation in the best possible way. We can discuss the fact that more modern aircraft are quieter and consider the number of aircraft that fly over a place during a specific period. I also understand that noise causes people nuisance in different ways. Some people might be affected by a one-off noise that is especially loud, while others may be affected by a period of noise over several hours.

Julian Brazier: rose

Derek Twigg: I will give way to the hon. Gentleman, but would like to make some progress because I have been generous in giving way.

Julian Brazier: The Minister has indeed been generous, so I thank him for letting me intervene. Will he just clarify to which airports his pledge on the night cap at the present numbers up to 2012 will apply?

Derek Twigg: I have made it clear that that will apply to Heathrow. We will communicate our intentions on Gatwick and Stansted later on.

Edward Garnier: rose

Derek Twigg: If the hon. and learned Gentleman does not mind, I would like to make some progress with my speech. It is important that I repeat that I am aware of worries about the way in which the Government might use the amended provisions. However, I have made our position clear.
	Lords amendment No. 11, which is a Government amendment, changes the commencement provisions of the Bill and prevents the relevant changes to the existing legislation from being brought into force before June 2012. It gives additional legal force to our commitment that there will be no change to our policy of setting night-time limits on both aircraft movements and the noise quota at each airport before 2012. Government amendment (a), which we are offering in lieu of Lords amendment No. 11, will correct the numbering of the provisions in clause 2 that cannot be commenced before June 2012, which will be necessary if clause 2(2) is reinstated in the Bill.
	We, of course, understand the value of movements limits to residents around the designated airports at present, which is why we have proposed that they should continue to be set as part of the regime to apply from October 2006. However, a movements limit alone would be a pretty blunt instrument because it would not directly control the amount of noise permitted at night, and neither could it influence the types of aircraft used at night. Noise quotas are set alongside the movements limits at present to drive the use of the quietest aircraft available.

Edward Garnier: Clearly the Minister and the Government as a whole think that designation under the 1982 Act is a good thing because they would otherwise abolish it. Why is he designating only Gatwick, Stansted and Heathrow, but not Nottingham East Midlands airport, which has a number of flight movements now that is well in excess of the number of such movements in and out of Heathrow, Gatwick and Stansted at the time at which those airports were designated? There does not seem to be much logic attached to the argument.

Derek Twigg: The hon. and learned Gentleman spends a lot of time on this subject and has a great deal of knowledge about the previous Government's relationship with those three airports. We listen to what is said. I understand that he has a difference of opinion on Nottingham East Midlands airport. It is important that the airport consults residents and the local community and involves them in the process. We think that the situation is best dealt with locally for such airports.

Adam Afriyie: Why is the Minister dressing up the Government's amendment as a concession? It seems to me that when the negotiations that are under way on flight numbers between October 2006 and 2012 are finished and the numbers are agreed, the Government will not have room to manoeuvre on flight numbers anyway. The amendment is not a concession, so why is he arguing that it is?

Derek Twigg: The hon. Gentleman is entitled to his opinion, but he will have heard from my hon. Friends that my announcement has been welcomed. However, I understand the point that he makes, and we listen to arguments that are put forward. I wish to make some progress because I have taken many interventions and hon. Members will want to make their speeches.
	The Government try to take a balanced approach on controlling and mitigating the noise impact of night flying at Heathrow, Gatwick and Stansted. We are not seeking more flexible powers to use immediately, but believe that it is right to ensure that they will be available, if needed. We do not believe that any future Government would use the powers unreasonably. If they were they to do so, they could be subject to a legal challenge. The Government remain convinced that it is right to amend the legislation in such a way.

Julian Brazier: On Second Reading, in Committee and in another place, our Front-Bench spokesmen stated that the time had come to marry better the twin desires of extending the opportunities offered by world travel and bringing the airlines on board as partners in achieving serious environmental goals, whether they are global or for people's local environments. However, from a reading of the Bill, it sadly looks more and more as though the Government's idea of partnership is based on what is going on in Downing street. We wished to remove clause 2(2), because it was painfully apparent that we had to allow residents and airports to co-exist more harmoniously.
	The Government's announcement a few minutes ago about Heathrow to 2012 is welcome but prompts questions about other designated airports and Heathrow after 2012. As hon. Members know only too well, the issue is the balance between numbers and quotas as a means of controlling noise. The mitigation of noise and vibration from aircraft taking off and landing at designated airportsHeathrow, Gatwick and Stanstedis achieved, as the Minister said, by restricting the number of movements and by the noise quota. Noise can be a considerable impediment to the quality of life of people who live near an airport or under a flight path, as Members on both sides have made clear. If the noise of an aircraft taking off wakes someone, it does not matter if it is only just loud enough to do so or is extremely loud. Furthermore, as has been made clear by Lord Hanningfield, our Front-Bench spokesman in another place, the quota system itself, which is all that will be left, is highly technical and often incomprehensible to the people it is meant to protect.
	Less noise does not always mean less disturbance, and that is emphatically the case if the system of measurement leaves something to be desired. While noise is measured in decibels, the level equivalentLeqis an index of aircraft noise exposure. It is a measure of the equivalent continuous sound level averaged over a 16-hour day from 0700 to 2300, and is taken during the peak summer months from mid-June to mid-September. The Heathrow Association for the Control of Aircraft NoiseHACANand Clear Skies, a voluntary organisation that campaigns on behalf of people affected by flight paths, have issued a joint paper that makes interesting reading. It argues that the level equivalent system underestimates aircraft noise in three key areas. First, it can be misleading to average out aircraft noise, for the obvious reason that if someone is woken by noise, it does not make much difference how loud it is. Secondly, low-frequency noise is ignored by the measure. Thirdly, and crucially, the Leq classifications often underestimate the minimum level of noise that annoys people.
	The HACAN-Clear Skies report claims that low-frequency rumbling is a significant component of aircraft noise. Including it in the measurement can increase the noise of a plane passing overhead by about 8 decibels. More to the point, many improvements in aircraft noise are primarily concerned with mid to high-frequencies. Perhaps the best way to illustrate its shortcomings is to cite the example given by Lord Hanningfield, who said that
	a single Concorde on departure has
	perhaps I should say, had, given the sad loss of that great if noisy aircraft
	the equivalent noise energy of 120 Boeing 757s. Thus, a Boeing 757 departing every two minutes for four hours produces the same level equivalent as two minutes of Concorde, followed by three hours and 58 minutes of silence.[ Official Report, House of Lords, 8 March 2006; Vol. 679, c. 772.]
	I urge the House to consider whether it would prefer to have the magnificent opportunity to see and hear Concorde in their skies again for two minutes or four hours of aircraft taking off every two minutes. Under the Leq system, on which we will be entirely reliant after 2012, the two events will be treated as equivalent.

Justine Greening: Does my hon. Friend agree that the problem with the Leq measurement partly stems from the fact that it works on averages rather than maximums? It is the equivalent of someone trying to avoid a speeding ticket and prosecution by saying, Ah yes, officer, but I only did an average of 68 mph when I drove up the M1 to Yorkshire from London. It is a fundamental misunderstanding of the way in which the data should be used to protect residents on the ground.

Julian Brazier: My hon. Friend's ingenious analogy shows how weak is the system, which will be the only way of controlling noise.
	The frequency of flights through the night and early morning, when there is reduced background or ambient noise, is not considered. The same total noise exposure can be achieved with a few noisy aircraft or a larger number of less noisy ones. The removal of the night movements limit implies that as aircraft become less noisy, more flights can be accommodated in the same noise quota. For example, under the quota count system, one Boeing 747 could be replaced with four Boeing 777s. It is no wonder that hon. Members on both sides who represent residents in the vicinity of a designated airport are concerned about the proposal, especially as the relationship between airports and local residents is not bathed in trust.
	Mr. Steve Charlish, who is well-known to my hon. Friends as chairman of the East Leicestershire Villages Against Airspace campaign group, sent a letter to the managing director of Nottingham East Midlands airport :
	You might be aware that I have sent since 8th August 2005, forty two...noise complaints...sent by fax to your offices, relating to NEMA aircraft noise. However you may not be aware that I have had no response to my 145 complaints of wholly unacceptable aircraft noise, detailed within those 42 pages since that date 8th August 2005. As your radar records are deleted within 30 days, it is essential therefore, for me to bring this to your attention, as this makes further scrutiny of complaints impossible.
	Evidence supplied by Steve Charlish and others makes it clear that people whose lives are disturbed by aircraft noise and movements that deviate from established flight pathsthe Minister did not discuss that at alland who make frequent complaints are regarded by NEMA as nuisance complainants.
	It does not help that responsibility for such things is fragmented between different agencies and organisations. The public and Members of Parliament are given the runaround by airports and the air traffic control system responsible for air traffic movements if they try to establish whether a flight diverged grossly from its flight path, which is why we sought to provide in another part of the Bill for a commercial flights officer. I do not wish to reopen that debate, as I simply wish to highlight the fact that there is little protection against noise. Airports do not always have the facts to hand, which is why we should be concerned about the removal of one of the two remaining golf clubs in the bag.
	Page 117 of the White Paper on the future of air transport highlighted the obligation
	to put in place a scheme to address the problem of generalised blight resulting from the runway proposal.
	The stop Stansted expansion campaign highlighted BAA's disregard for that obligation, which has resulted in local communities around the airport, led by Takeley parish council, pursuing a legal challenge againstBAA. It estimates that airport-related housing blight, resulting from plans to expand Stansted announced in July 2002, totals 635 million across Uttlesford district as a whole. According to analysis taken from the latest Land Registry house price statistics, the number of affected homes is about 12,000. However, BAA is prepared to consider compensation for only about 500 homes in the immediate vicinity affected by airport expansion.
	Any increase in night-time disturbance has the potential seriously to alter the value of someone's home, the most valuable asset that most people own. It is not good enough for the Minister to say, Trust us, or rather, You'll be okay at Heathrow until 2012, but the other designated airports must trust us, and people round Heathrow will have to trust us after 2012. The Lords were right to strike out subsection (2) and to reinstate the power to control numbers. I urge the House to support their verdict.

John McDonnell: I am not just disappointed with the Government's attitude towards Lords amendmentNo. 5; I am ashamed of it, because of the campaigns that I and a number of colleagues have waged over the years against night flights and their environmental impact on our constituents and on London overall. The only advantage of the amendment is that the debate allows me to miss the parliamentary Labour party meeting currently going on.
	The move to abolish the flight numbers restrictions stems from a concerted, well funded and lengthy lobby by the aviation industry to increase the number of night flights. Over a considerable period, aviation companies, BAA and others have plugged away at successive Ministers to achieve that end. The claim that the overall noise climate limit will be sufficient to protect people from noise disturbance is a disingenuous ploy to increase night flights.
	As we know from consultation, the industry is determined to increase the overall number of night flights. The argument is that the overall reduction in the noise climate will allow more night flights. The industry has mobilised for so long that it is bringing the issue to a head. But that argument fails to take account of how noise impacts on individuals and their familiesour constituents. The disturbance affects their sleep, their work, the education of their children and their environment. When a family gets up for breakfast, it does not usually discuss how good was the night before or what the level equivalent of decibels of effective perceived noise was. They usually say, Did you hear that one at 5 am?, or at 4 am or whenever. They discuss how it disturbed the children during the night and how the family has been disturbed over a long period.
	The noise disturbance is not related solely to aircraft in the sky. In my constituency, the impact for many residents comes from ground noisetraffic to and from the airport, with airport workers going to receive the night flights, the goods vehicles and the passengers travelling to and fro in their vehicles. Unfortunately, a vast proportion of that traffic still consists of cars and larger vehicles travelling through the areas surrounding Heathrow and through my constituency at night, disturbing the peace of residents.
	That is why the overall noise and movement limits, working together, offered at least some limited protection. I agree with what others have said across the House. Our ambition was to have no night flights at all, and we thought we would eventually be able to persuade a Government of the sense of it. The combination of overall limits and limits on numbers had some effect. The removal of the numbers will have a deleterious effect on my constituents because it will blight their environment and, as some have said, their properties for a long time to come. The delay to 2012 is no concession whatever. It is no compromise. It is probably dictated by the time that the Government need to implement the system effectively.
	Consultation is meaningless as some form of compromise offer to my constituents. We have been consulted so often on the development of the airport, and never listened to, that people are cynical about the entire concept. As hon. Members have said, in consultations over the past 30 years we have been promised no further terminals and no further runways. Ministers have raised in the House the issue of caps on movement, yet over time each proposal has been discarded.
	I cannot understand why the Government are going along with the idea. I cannot comprehend why they are flying in the face of popular opinion, as expressed by a vast range of the population of London and elsewhere. The only reason that I can believe is that the aviation industry has, yet again, been able to mount such an effective lobby that the Government have, again, conceded.

Justine Greening: The hon. Gentleman makes an excellent point. Is he aware that councils representing 2.3 million people wrote in at stage 1 of the night flights consultation expressing deep concerns about night flights and their impact on residents? Does he agree that it is a scandal that those councils have been so systematically ignored?

John McDonnell: The hon. Lady will agree that if consultation means anything, it must mean that the Government listen to the vast majority. An overwhelming majority have told the Government that they should not move. If we cannot improve on existing protection mechanisms, we should at least maintain what protection we have. I am extremely disappointed. I realise that every vote against the Government at present is an act of regicide, but I will vote against them tonight, because this is our only opportunity to register our anger, as communities, about the way they are letting down people who want their environment protected and who just want a decent night's sleep.

Alistair Carmichael: It is a pleasure to follow the hon. Member for Hayes and Harlington (John McDonnell), who says that if consultation is to be meaningful,the Government must listen. We know, of course, that the Government do listen. My concern is who they are listening to on this occasion. It is pretty clear that they have not been listening to the hon. Gentleman's constituents, those of my hon. Friend the Member for Richmond Park (Susan Kramer) or those of the hon. Member for Windsor (Adam Afriyie).
	The Government have been listening to the airline operators. It is clear on this issue that the Department for Transport has become a wholly owned subsidiary of the airline industry. That is who the Government are listening tonot the people who are suffering from the disruption and whose lives and property prices are being blighted by the increase in airline movement at night.
	I shall not detain the House by rehearsing arguments already made. A numerical cap has one overall advantage: it is completely transparent and understandable. Concepts such as quotas or noise footprints, such as those outlined by the hon. Member for Canterbury (Mr. Brazier), are opaque. Nobody can have any confidence that such measures, once put in place, are properly observed. A numerical cap may have disadvantagesas my hon. Friend the Member for Richmond Park said, many communities living close to airports would rather there were no night flights at allbut it has the advantage of clarity.

Susan Kramer: Does my hon. Friend agree that there is no logic to the proposal that a particular set of limits should apply at Heathrow until 2012 and collapse thereafter? The aircraft fleet that flies in and out of Heathrow will be essentially the same for the next20 years. There is no prospect of significantly quieter aircraft and therefore no logic for arguing for a change of regime six years from now.

Alistair Carmichael: I cannot but agree. The Minister's so-called concession today was greeted with justifiable ridicule. It is no concession at all. As he said, the limits will be set by the end of this month and will be in place until 2012. Thereafter, as my hon. Friend says, there may be some marginal improvements, but the situation will not be radically different from that which pertains already. As has been said, it is difficult to see the merit of legislating now for a situation six years down the line.

Derek Twigg: Is the hon. Gentleman opposed to the Government's setting a limit till 2012, as I announced today?

Alistair Carmichael: No; I am opposed to the Minister's coming to the House and pretending that his concession is a case of anything other than bowing to the inevitable.

Derek Twigg: Is the hon. Gentleman in favour of it?

Alistair Carmichael: We were going to get it anyway, so I have no difficulty with it. However, I have difficulty with yet another example of spin from the Government, who are trying to pretend that they are giving us something special when they are actually giving us something that we would have had in any event.
	A number of points have been made about the inadequacies of the quota system, and my noble Friend Lord Hanningfield dealt with them in detail in the other place on Report on 8 March. If any hon. Members have not read that speech yet, I encourage them to do so, because it highlights the intellectual inconsistency and political dishonesty of the Government's position. I urge the House to hold firm behind the Lords amendment.

David Wilshire: I apologise to the Minister because I was not present for his opening commentsI was trying to extract myself from Heathrow and get here on time.
	Some hon. Members are known as the usual suspects, and that description has been applied to the hon. Member for Hayes and Harlington (John McDonnell) in another context. When we debate Heathrow, it is often the case that a group of hon. Members say one thing and I do not agree with them, but there are some issues on which every one of us says the same thing. From time to time, people argue that everybody who lives near the airport agrees about everything, but that is not true. If we were to debate terminals or runways, I might not be among the usual suspects who criticise any change at Heathrow, but on this matter, I have always said that we should be phasing out night flights rather than finding ways to increase them.
	In my experience of listening to my constituents who live up against the boundary fence, it is not the amount of noise that wakes them up, but the fact that there is noise. If aircraft were to make less noise, it is my guess that people would still be woken up. I do not buy the argument that the policy is the result of huge pressure for extra night flights, because I am unaware of a vast demand for extra night flights at Heathrow, and whenever I talk to those concerned, they seem willing to accept that we could phase them out. In my experience of listening to my constituents and of living under the flight path, the argument that quieter aircraft will not disturb people is total nonsense. The House of Lords was absolutely right to remove the provision.
	I recognise that a compromise has been offered. All I say is that my constituents are not interested in compromise, because they want fewer night flights, not more, and in the end they want none at all.

Adam Afriyie: As I am the Member of Parliament for Windsor, thousands of my constituents live under flight paths, which is also true of many otherhon. Members, and as a member of the Standing Committee that scrutinised the Bill, I am aware of the sleight of hand contained in the legislation. As an advocate of reasonable measures to protect the environment for people living under flight paths and close to airports, I am pleased to speak in favour of Lords amendment No. 5. I am also pleased to have the chance to speak against Government amendment (a), which is not only illogical, but sneaky, unworkable and underhand; it seeks to remove protections and open up the night skies to a flight bonanza.
	Let us be clear that the frequency of noisy flights ruins the sleep of residents. The economic benefit associated with the use of airports for business activity is certainly desirable, and if air traffic needs to expand, perhaps we can allow for it in the long term with quieter aircraft, provided that air quality is kept within tight limits and access to airports is available. However, it is a sobering thought that our tourists spend 16 billion more abroad than incoming tourists spend visiting the UK, which is perhaps an issue for the Chancellor of the Exchequer.
	The Civil Aviation Act 1982 empowered the Secretary of State to limit the number of flights at designated airports. A straightforward limit on the number of flights is easily understood by everyone; for example, 16 flights are currently allowed at Heathrow during the night period and, despite the disturbance, affected residents know what that limit means. If the noise associated with a particular flight is louder than 90 dB on the ground, people are likely to be rudely awakened. It is the noise created by individual aircraft combined with the number of flights during the night that disturbs residents' sleep.
	Government amendment (a) is strange. It proposes that at some future point the noise made by individual aircraft and the number of flights during the course of the night will be ignored. Instead, the Government want to rely on a complicated scheme based on average noise levels during a night period. Average noise levels have never woken anyone, because it is the absolute noise and frequency of flights that disturbs people. We must ask ourselves why the Government propose to scupper Lords amendments Nos. 5 and 11, which are sensible.
	Let us take a quick look at how the Government's scheme will operate. The night noise quota scheme ranks aircraft types according to their noisiness on take-off and approach for landing. For example, if the noise is above 101.9 dB, the quota count for that aircraft is assigned as 16. If the noise is between 99 dB and 101.9 dB, the quota count for that aircraft is halved and becomes eightthe scale is exponential. If the noise is between 96 dB and 98.9 dB, the quota count for that aircraft is halved again to four. The quota count continues until the noise level falls below 90 dB, when the aircraft is assigned a quota count of a halfI hope that hon. Members are still with me. The Secretary of State then sets a limit on the total quota count points for the average across a season or a night period, which translates into a number of flights. If we were to use the pure quota count system that the Government are seeking to introduce today, twice as many flights would be allowed at night with planes rated at 95 dB than with planes rated at 96 dB. The system is complicated, and complicated systems are often designed to hide simple truths.
	Why have the Government introduced an amendment to remove the flight limit, after indicating in writing to many hon. Members that they would support the Lords amendment? There is only one explanation, and I have heard no other so far: the Government want to allow an increase in the number of flights at night. As I have said, they have argued that the measure will not be introduced until 2012, but hon. Members should not be deceived. That is not a concession, because the arrangements until 2012 will be announced in the next week or so, and it is simply not possible for the Government to change that agreement before 2012. The Government are trying to appear reasonable by making a semi-concession, when they are in fact behaving completely unreasonablyit is a phantom concession.

Derek Twigg: Will the hon. Gentleman tell me whether he supports my earlier announcement on Heathrow up to 2012?

Adam Afriyie: In an earlier intervention, the Minister asked the hon. Member for Richmond Park (Susan Kramer) exactly the same question. I completely reject Government policy in this area, which is ridiculous, and is just a ruse to pretend that they are making a concession. There is no concession, so there is nothing to discuss. The White Paper said that the Government would bear down on noise, but in reality they are easing up on noise. Hon. Members must ask themselves whether they want to be responsible for easing up on noise and on night flights.
	There is a better way, although I do not have time to go into the detail. We should retain the limit on flights and accelerate the arrival of significantly quieter aircraft. In time, perhaps we can set a limit on the maximum noise generated by aircraft movements at night. Above all, we can reject the Government's sneaky amendment today, which will undermine the one sure route to secure a decent night's sleep for residents. I urge hon. Members to vote against Government amendment (a) and to maintain the flight limit, for the sake of the millions of people who will be affected.

Justine Greening: My constituents, especially those who live close to the river and are worst affected by night-time, and indeed daytime, noise will be dismayed to hear that the Government still, despite the Lords proposals, want to remove the cap on movements into and out of Heathrow. If Heathrow is to expand, my constituents must have a right to an adequate and sustainable quality of life. There is no chance of that happening on the basis of the Government's proposals, which will allow Heathrow as many flights in and out as it likes. To my mind, that is community vandalism writ large over west and south-west London.

John Randall: Does my hon. Friend think that there would be any merit in trying to get an antisocial behaviour order against the Government for such antisocial behaviour against all our constituents?

Justine Greening: I have indeed considered that. One of my questions for the Minister was this: can local councils use the additional powers that they have recently been given against aircraft operators who, it can be argued, are behaving antisocially by creating noise at night? If I did that to my neighbours every night from 4.30 am to 6 am, they would surely complain. What action can local councils now take against aircraft operators landing early in the morning and late at night?
	This is an act of community vandalism. The Government came to power saying that they would be the servants of the people not the masters, but they have completely reversed that position by systematically ignoring millions of people in the south-east, particularly in London, and going ahead with their proposal to take away the cap on movements into and out of Heathrow, irrespective of what local people say.
	After the first stage of the night flights consultation, I asked the Government to tell me precisely how many people had asked for an increase in night flights, given that that was the proposal in stage 2. I received no answer of substance. As the Minister may be aware, I went down to the Department for Transport to look through the responses and correspondence that it had received after stage 1. I found a total of three people who wrote in suggesting more night flights. I saw responses from councils representing 2.3 million people who had expressed their concerns over the current level of night flights, with most wanting them eventually to be reduced to zero and many wanting that to happen immediately. I saw correspondence from more than 1,000 individual constituents and petitions from several hundred constituents all saying that they were concerned about the existing level of night flights and wanted a reduction.
	What we have from the Government is merely a political fudge. People in my constituency are expected to be pleased because the Government have not made the situation any worse. That is unacceptable. They have been systematically ignored, and that will not be sustainable in the long run. The Government talk about sustainable communities and sustainable development, but that seems to end when it comes to airport expansion. One has to ask why so many millions of constituents can be ignored over such a prolonged period. That suggests that any ongoing consultations are merely a sham that do not recognise the real consultations that are going on behind the scenes with aircraft and airline operators. Today I tabled parliamentary questions to elicit from the Government what meetings they have had with aircraft operators and other interested industry participants. If the Minister can answer tonight, I will be interested to hear the outcome.
	The Government cannot scratch their head and wonder why people do not turn out to vote in local and national elections when they ignore people so systematically on such a clear issue as the expansion of Heathrow, night flights and movement limits on all airportsnot only Heathrow but Stansted and Gatwick. That is a democratic deficit that cannot be allowed to continue. I hope that even at this late stage, the Minister will decide to withdraw the Government proposal.

Derek Twigg: I listened carefully to what hon. Members said about disturbance and so forth, and I understand their concerns. Interestingly, the hon. Member for Canterbury (Mr. Brazier) pointed out that the experience of noise levels, particularly low frequency noise, varies from person to person, so different people are disturbed by different noises. I accept that there is a genuine problem and that Members are putting forward the concerns that have been expressed to them by their constituents, but I think that we will have to differ. I take issue with the hon. Member for Windsor (Adam Afriyie), who, in suggesting that the Government's policy was to have open skies and as many flights as possible, was not only a little disingenuous but very wide of the mark.
	In dealing with aviation, night flights and the number of disturbances, we have to strike a balance between the economic benefits of a vibrant and significant aviation industry and the social and environmental consequences. That is always difficult, and there will of course be differences of opinion among Members. I have an airport on my doorstep and planes flying over my house. I understand the issues that local residents will raise about disturbance, because I deal with that from my own constituents. It is a balancing act in terms of the problems that can be caused, and the economics. For example, large numbers of people are employed in the industry.

John Randall: Does the Minister think that reversing the Lords amendments will benefit people or commercial interests?

Derek Twigg: I understand the hon. Gentleman's point, but it is important to bear in mind the balance that can be struck. Many people would not want any flights, full stop. I understand that position. On the other hand, we need to be aware of the economic factors. Hon. Members will always advance arguments as to whether a proposal benefits the aviation industry or local residents and constituents. We believe that our approach of rejecting the Lords amendments is the best way to tread that narrow line. Hon. Members will disagree with that, as they are entitled to, but it is based on a balanced judgment.

John McDonnell: As my hon. Friend is new to this brief I would like to mention the historical record of the past 40 years and more, as Heathrow has developed from a row of tents. As for the balance between the environment and the development of the airport, there has not been a single occasion throughout that whole period when Heathrow has come to the Government to ask for a development and the Government have not eventually conceded.

Derek Twigg: I know that my hon. Friend campaigns strongly on issues about which he is concerned on behalf of his constituents. However, it is important to bear in mind that the developments that have taken place in improving and expanding airports around the country have been of great benefit to the economy. I understand his point, but I would still argue that the Government's balanced judgment is right.

John McDonnell: The simple point that I am making is that one decision in favour of the local community and the local environment in 60 years would demonstrate an element of trying to redraw the balance. The decision that we are considering tips the balance the other way, in favour of the industry against the local residents.

Derek Twigg: I am sure that my hon. Friend will not be surprised to learn that I do not agree with that. He commented earlier on my commitment to no increase at Heathrow until 2012, and how his constituents would perceive that. Other hon. Friends said that the decision would be welcomed as an important and positive step by the Government. Again, there is a difference of opinion about perception and the worry that my hon. Friend and others have expressed.

Susan Kramer: The Under-Secretary has mentioned economic benefit several times. I received a written answer from a previous Minister saying that the case for the economic benefits of night flights had not been made. We have often asked about the marginal economic benefits of constant expansion at Heathrow, but that case has not been made either. I therefore advise him to consider carefully and not take at face value arguments that use the words economic benefit.

Derek Twigg: The hon. Lady makes a good point about arguments for economic benefits and the social and environmental consequences. It is important to bear in mind that the Government always keep those matters under review. The consultation process has just taken place. Some hon. Members imply that there will automatically be an increase at Heathrow after 2012, but they are trying to assess a position that we have not yet reached. The Secretary of State at that time will have to take account of what has happened in the intervening period. That will be important in reaching a conclusion. I stress again the fact that the Government's move on Heathrow until 2012 is positivebut I accept that, as the hon. Lady said, there is a difference of opinion about the extent of the economic impact and how it is determined.

Adam Afriyie: Let me ask the Under-Secretary a fairly straightforward question. Does the Bill allow increased night flights from Heathrow from 2012?

Derek Twigg: Unless I am mistakenI am happy to explain if it is not the casethe Government can examine the position at the airports and make decisions about the number of flights and so on. Such decisions would still have to be part of a consultative procedure. Who knows what the Secretary of State at the time will conclude, taking account of the prevailing factors such as numbers of flights, benefits to the economy, social and environmental consequences and so on, and what happens between now and then. Those important factors would have to be considered. Someone else may be doing my job by then, and we must wait and see.

Justine Greening: The Under-Secretary is possibly rightand neither he nor his Government will be around when the Bill is implemented. It appears as though a Government in their dying days are leaving my constituents and many others a legacy that they will have to put up with long after that Government are out of power. Does he agree that although the decision is delayed, it is a little like delaying a death penalty and having a stay of execution? My constituents will continue to suffer uncertainty and blight on their properties. What will happen in 2012? It appears that if the Bill is passed, they can look forward to more night flightsand more day flights.

Derek Twigg: The hon. Members for Richmond Park (Susan Kramer) and for Windsor have already tried to argue that the Bill automatically means an increase, but I am trying to make it clear that our proposals are the best way forward to achieve a balance between flights, the economy and, of course, the social and environmental consequences. I understand the argument for automatically assuming an increase, but we must take account of what happens. The Secretary of State at the time will examine the position, and I stress the fact that changes can be made to the quotas and so on as time goes on. However, there is a difference between the hon. Member for Putney (Justine Greening), other hon. Members and me about that.
	Let me go into a little more detail about the number of movements, overall noise and how that influences disturbances, which hon. Members have raised. Some stakeholders argue in favour of movement limits and against setting night restrictions by referring to overall noise, because each instance of an aircraft flying overhead disturbs someone. The hon. Member for Canterbury made that point earlier when we considered low frequency noise. Reaction varies, and it is suggested that it may be better to consider individual flights rather than cumulative noise over a period.
	Reactions to noise are subjective and therefore vary greatly from person to person and from time to time. Sleep disturbance is no exception. Despite extensive research, views differ both among those who suffer from noise and among the scientific community about whether a single loud noise or event, or an accumulation of smaller noises and events, cause more disturbance. I accept that the matter is subjective, but there is discussion and argument about it.

John McDonnell: The World Health Organisation states that we should cover both. Its guidelines for noise levels state that
	when there are distinct events to the noise, such as with aircraft or railway noise, measures of individual events such as the maximum noise level should also be obtained.
	The World Health Organisation therefore contradicts the Under-Secretary and says that we should set parameters for individual events as well as an overall climate.

Derek Twigg: I understand my hon. Friend's point about World Health Organisation standards. Let me consider that in more detail. I am surprised that it has taken so long for hon. Members to bring up those matters.
	The Government framed their proposed environmental objectives for each airport in the recent consultation on night flying restrictions at Heathrow, Gatwick and Stansted, taking as long-term targetsthe World Health Organisation's standards on the mitigation of noise and its Guidelines for Community Noise in respect of night noise. That approach to the World Health Organisation's guideline values for night noise is consistent with its recommendations. The guideline values on aircraft noise were recommended as long-term targets for improving health.
	The values are low, and it would therefore be difficult, if not impossible, to achieve them in the short to medium term without draconian measures. I ask my hon. Friend to bear that in mind. However, the World Organisation did not propose that. It would not be feasible to reduce noise to such a level in urban or rural settings generally, and the World Health Organisation did not suggest that. We are committed to taking account of the guideline values, and we will do that over the 30-year time horizon of the air transport White Paper.
	We also support the World Health Organisation's conclusions about regular reviews and revisions to the guidelines as new scientific evidence emerges.

Julian Brazier: Does the Under-Secretary accept that even if there are some disagreements in the literature about the levels and frequencies of noise that most disturb sleep, there can be no doubt that the number of night flights is clearly and unequivocally measurable? The so-called average amount of noise generated through the night is difficult to measureindeed, given the lack of response by protesters to individual flights that appear to have deviated from their flight paths or perhaps should not have taken place, it seems to be impossible in some cases.

Derek Twigg: I hope that the hon. Gentleman will bear with me while I finish this point.
	My hon. Friend the Member for Hayes and Harlington made an important point about the World Health Organisation's guidelines on night noise. We must remember how subjective people's judgments can be, and how important it is to address this issue while taking account of the economy and trying to strike the balance that I have been talking about.
	The WHO guideline values on aircraft noise were recommended as long-term targets for improving health, and the values are very low. We also support the WHO conclusions for regular reviews and revisionsto the guidelines as new scientific evidence emerges. The guidelines also recommend that cost-effectivenessand cost-benefit analyses should be considered when making management decisions relating to their implementation. The Government are carrying out this process as part of the regulatory impact assessment of the restrictions, which my hon. Friend the Member for Hayes and Harlington might find interesting.
	I want to return to the effect of the number of movements and of overall noise levels on disturbance. I know that hon. Members will want to hear the important points that I have to make on this matter, because of the concerns that they have raised this evening. It is worth emphasising that research has suggested that the incidence of sleep disturbance is especially associated with the loudest noise events, and in particular those that produce more than a 90 dB sound exposure level. The hon. Member for Windsor mentioned this issue before, saying that it was all very complicated and that he wanted a simple solution to the matter. However, the issue of disturbance is always complex, in that it affects different individuals in different ways. I can assure the hon. Gentleman, however, that these matters have also been raised with me as a constituency MP, and I am well aware of the representations that can be made about them.

Kelvin Hopkins: I am interested to hear what my hon. Friend is saying, but has not the point been made by Opposition Members that the frequency of aircraft movements is much more important? According to the way in which these things are calculated for regulation purposes, one very loud noise is the equivalent of several much smaller noises. Luton airport is three or four miles from where I live, but I can still hear flights taking off at night on rare occasions, even though they are not very loud. The frequency is much more important than the volume. Surely the Government should be more concerned about the number of flights than about the volume, as Opposition Members have pointed out.

Derek Twigg: My hon. Friend makes an important point, which other hon. Members have also raised. Different people have different noise thresholds, and that can also depend on whether they live close to the airport or further away. Flights come over my house, and I understand that this can be an issue.
	As I said a moment ago, research has suggested that the incidence of sleep disturbance is especially associated with the loudest noise events, and in particular those that produce more than a 90 dB sound exposure level. That measure expresses the level of a noise event as though all its energy were concentrated evenly in one second. It takes account of the duration of the sound and its intensity. A plot connecting points of equal sound exposure level from the departure or approach of a particular type of aircraftor an envelope of the twois known as a noise footprint. Hon. Members have already mentioned such footprints.
	The night noise insulation criterion that we have proposed as part of the consultation on night flying restrictions at Heathrow, Gatwick and Stansted airports relates to the 90 dB sound exposure level footprint of the noisiest aircraft operating at each airport. Such noise insulation seeks to mitigate the impact of each flight, as do the noise quota limits, by encouraging the use of quieter aircraft [ Interruption.] Does my hon. Friend the Member for Luton, North want to intervene on me?

Kelvin Hopkins: indicated dissent.

Hon. Members: You're on your own!

Derek Twigg: I just want to say to hon. Members that there is growing interest in this debate on both sides of the House, and it is important that I give as much detail as possible to Members.

Julian Brazier: I am grateful for the opportunity to be able to refresh the Minister a little. Will he tell the House something about the decibel levels in the Committee Corridor at the moment?

Derek Twigg: Is the hon. Gentleman referring to the journalists outside the Committee Room, or to what is going on inside? I am sure that if I try to go down the path of answering that question, you will cut me short very quickly, Mr. Deputy Speaker. So I do not intend to do that

Mr. Deputy Speaker: Order. I certainly think that the debate should be confined to civil aviation, and the Minister should know that the occupant of the Chair has a great interest in that subject and is listening keenly.

Derek Twigg: I am very much aware that you have a great interest not only in this subject but in railways,Mr. Deputy Speaker. I could talk about railways for a long time, but I am sure that you would not allow me to do that, although there are important issues that link railways and airports. The number of people using airports depends on the transport links to those airports, and I understand the importance of those links.
	The subject of sleep disturbance has been raised in previous debates on the Bill, and I want to put on record the Government's approach to the matter. We have undertaken a considerable amount of research into the effects of aircraft noise on sleep. The last major study commissioned by the Government, completed in 1992, concluded that high aircraft noise levels could awaken people, but that the likelihood of the average person having his or her sleep noticeably disturbed due to an individual aircraft noise event was relatively low. That research was carried out in 1992, and I am sure that hon. Members will have their own view about its relevance and accuracy today. However, when considering numbers of aircraft movements, it is important to bear in mind that modern aircraft are much quieter than their predecessors.

Oliver Heald: The Minister has given the House an assurance today that the limit on night flights at Heathrow will be rolled forward. Why will he not make a similar commitment for Stansted?

Derek Twigg: I am not criticising the hon. Gentleman, because I know that he is concerned about these matters, but if he had been here earlier, he would know that we will be making further announcements on the consultation in the near future. I am not sure whether the Conservatives were in favour of what I announced tonight about the limits going on to 2012 at Heathrow. I have not heard whether the hon. Gentleman's party supports that change.

John McDonnell: While my hon. Friend has the opportunity to expand on the matters relating to the amendment, may I point out that some of the studies on sleeplessness have taken place at Hounslow, near Heathrow, although I am not sure whether any have taken place in my constituency? These measures are to be implemented in 2012, as he has proposed in the compromise that he has offered. May I remind him that Members of Parliament representing constituencies round Heathrow have been asking for an investigation into the overall health effects of the airport itself for some time? This relates to sleep deprivation. The Bill also deals with emissions, however, and air pollution also has an effect on people's health. We have had neither a specific study of sleep deprivation north of the airport nor a health study to examine the impact on the local community of emissions surrounding the airport. The local primary care trust has made representations to that effect in the past, and I would like my hon. Friend to take that subject from the debate so that funding by central Government can be considered in the interregnum between

Mr. Deputy Speaker: Order. Even in the current conditions, that was a long intervention.

Derek Twigg: My hon. Friend makes an important point about the disbenefits of air pollution. He may be aware that the Government published the air quality strategy for England, Scotland, Wales and Northern Ireland in January 2000 and that the strategy sets health-based objectives for the eight main air pollutants and deadlines for achieving them. It identifies the action required at national and international level and the contribution that the Government, industry, transport, local authorities, businesses and individuals can make to improving air quality.
	I know that this issue will concern you, Mr. Deputy Speaker, but the Environment Act 1995 places a duty on local authorities to review and assess the current and likely future air quality in their areas against the national objectives set out in the strategy and prescribed in the air quality regulations. The local authority role is important and if a local authority considers that one or more of the air quality objectives is unlikely to be met by the required date, it must declare an air quality management area covering the area in which the problems are expected. It must then draw up an action plan, setting out the measures that it intends to take in pursuit of air quality objectives.
	I have been diverted from the subject a little, but I wish to return to the issue of sleep disturbance, which concerns many Members. There are differing views among those who suffer from the problem as to whether a single loud noise or an accumulation of smaller noise events causes more disturbance. It is clear that disturbance is different from annoyance and from sleep deprivation, which relates to lengthy periods without sleep. It is also acknowledged that a small minority of people are much more sensitive to noise and sleep disturbance from aircraft noise than others. That is the important point.
	The results of the further study that reported in 2000 did not contradict the essential findings of the 1992 field study, and that is the point that I wish to make about the time lag between the two studies. In contrast, a social survey conducted in parallel reported that a substantial percentage of those interviewed in higher noise areas reported being highly disturbed by aircraft at night.
	After those studies the Government took the advice of independent experts and concluded that a new full-scale objective sleep study would be unlikely to add significantly to our understanding of the effects of airport noise on sleep disturbance. The Government then commissioned a major new study to concentrate on subjective responses to annoyance from aircraft noise and examined, in a hypothetical way, the willingness to pay, in respect of the nuisance from aircraft noise. It is acknowledged that our current understanding of the annoyance caused by aircraft is primarily based on research carried out in the 1980s.

John McDonnell: Can my hon. Friend just clarify the geographical basis of the recent study, the samples that were taken, the interviews that took place and the areas that were designated as the most affected?

Derek Twigg: I have not got that information to hand, but I will write to my hon. Friend following the debate.
	The study of how people would price nuisance from aircraft noise is designed to improve our understanding of the value that people give to relief from noise. We expect that the study, which has been guided by the steering group of a wide range of interests including environmental organisations who are represented, to be completed by about the middle of the year. The work is divided into two phases. Phase 1 has now been completed and has developed a stated preference methodology by carrying out a number of pilot surveys[Hon. Members: You can stop now.] I think that hon. Members will bear with me a few more moments, because there are other issues to discuss. Phase 2, which is the main survey and has recently been completed, applies the methodology and is reassessing the validity of the Leq family of noise indices as a proxy for relative community annoyance. I know that the hon. Member for Windsor has a particular interest in that aspect of aircraft noise.
	Finally, the hon. Gentleman referred to the Government writing to Members in support of the Lords amendments. The Government did not write to support the Lords amendments to abolish clause 2, but we did write at that time about tabling an amendment in the Lords to explain the clause.
	I thank you, Mr. Deputy Speaker, for your forbearance and urge the House to reject the Lords amendments.

Question put, That this House disagrees with the Lords in the said amendment:
	 The House divided: Ayes 286, Noes 204.

Question accordingly agreed to.
	 Lords amendment disagreed to.

Clause 4
	  
	Power for aerodromes to establish noise control schemes

Lords amendment: No. 6.

Derek Twigg: I beg to move, That the House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendment No. 7.

Derek Twigg: These amendments make two minor changes to the consultation requirement that subsection (5) of new section 38B places on the Secretary of State when proposing to make an order specifying an area within which a non-designated airport's noise control scheme shall apply.
	It has become apparent to us that although subsection (5) lists a number of specific statutory consultees, including the CAA, the operator ofthe airport, local authorities and organisations representing the interests of local people, the operators of aircraft that use the airport are not included on the list. The first [Interruption.]

Mr. Deputy Speaker: Order. I am sorry to interrupt the Minister. Could hon. Members not have conversations in the Chamber that distract from the main business?

Derek Twigg: The first of the amendments remedies that omission. It does so using the formulation,
	any body appearing to the Secretary of State to be representative of operators of aircraft using the aerodrome,
	which is used elsewhere in the Bill, specifically inclause 3, on page 4, in line 31. The latter amendment changes the reference to organisations representing the interests of local people, so that the same formulation is used consistentlythat such bodies are those,
	appearing to the Secretary of State to be representative,
	of those interests. The effect of the provisionthe requirement for the Secretary of State to consult bodies representing the interests of local peoplewill remain the same.

Julian Brazier: We have no objection to these minor amendments.
	 Lords amendment agreed to.
	 Lords amendment No. 7 agreed to.
	New Clause
	 Lords amendment: No. 8

Derek Twigg: I beg to move, That the House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it be will convenient to discuss Lords amendments Nos. 9,10 and 12.

Derek Twigg: The Government gave notice of their intention to make these amendments to the Bill in a written statement by the Secretary of State for Transport on 21 November 2005, and wrote to Opposition spokesmen to explain their purpose.
	Lords amendment No. 8 inserts a new clause into the Bill, giving effect to the schedule on policing at airports inserted by amendment No. 12. The schedule amends the Aviation Security Act 1982 in relation to the policing of airports that have been designated under section 25 of the ActHeathrow, Gatwick, Stansted, Birmingham, Manchester, Prestwick, Edinburgh, Glasgow and Aberdeen airports. Recently, it became clear that we needed to clarify the relationship between security and policing activities at designated airports. Increased clarity on that point should prevent future disputes between airport managers and the police. It has also become clear that we need to design a robust mechanism for resolving any disputes that arise.
	The amendments to section 26 of the Aviation Security Act 1982 will define and clarify the relationship between the activities of an airport manager and other directed parties at an airport, and policing activities. Our intention in doing so is to prevent disputes on that point and to ensure that the aerodrome manager and chief officer of police work closely together in protecting an airport. The amendments are in paragraph 3 of the schedule.
	Where an aerodrome has been designated under section 25 of the Aviation Security Act 1982, the manager of the aerodrome, the police authority and the chief officer of police will be required to enter into a police services agreement. The specific requirement is in new section 25B, which is inserted in the 1982 Act by paragraph 2 of the schedule. To remove any ambiguity over roles and responsibilities, the agreement should set out the level of policing services to be provided by the police, the amount to be paid for that policing by the airport manager and the facilities to be provided by him to the police. That is set out in section 25B(3).The specification of payments in the agreement may also include references to amounts paid to the police authority towards policing at the airport from sources other than the airport manager. We are thinking, for example, of Home Office grants that might be made to fund a particular initiative.
	The agreement will need to recognise that circumstances might change during the year. Section 25A(6) requires an agreement to include provisions that will allow it to be varied where there is a material change in circumstances. Before concluding an agreement, and to determine the appropriate level of policing services, the aerodrome manager and chief officer of police will be required to consult with the relevant stakeholders: those in receipt of directions under part 2 of the Aviation SecurityAct 1982, Customs officers and immigration officers. New section 25A provides for that consultation.
	Section 25A includes a delegated power for the Secretary of State to modify the consultation requirements, in subsection (4). Under new section 25A(5), the degree of parliamentary scrutiny prescribed is dependent on whether there is any controversy about such changes. I should note that new section 25A(6) was subsequently amended by the Lords on Report. That minor change for clarification, which does not alter the substance of the provisions, has been taken up in the version of the schedule that we are debating today.
	Where the partiesthe aerodrome manager, police authority and chief officer of policecannot reach an agreement because they disagree on a particular aspect such as the level of policing to be provided, or are in dispute over the terms, construction or operation ofan agreement, the matter will be referred for determination by an independent expert or tribunal of experts. Paragraph 4 of the schedule therefore inserts new sections 29A to 29D into the Act. Under new section 29A(1), any of the three parties is entitled to ask the Secretary of State to set up the expert determination. The expert should be an independent person appointed by the Secretary of State for the particular dispute, and agreed by the aerodrome manager on one side and the police parties on the other. If the parties cannot agree, the Secretary of State will require each side to appoint an expert and those two experts to appoint a further panel member to act as chairman. New section 29B provides for those arrangements.

Patrick Mercer: I was going to intervene, but if the Minister has finished, I will make a quick response. I was interested in what he had to say, as much of it as there was.
	At a recent Transport Committee meeting, the hon. Member for Manchester, Blackley (Graham Stringer) took evidence from Chief Superintendent Savill on this very point, who said:
	There are a number of the recommendations that we feel frustrated with as a police service. I think the overriding one would be that Sir John
	Wheeler
	wisely recommended the mechanism for what we call 'designating' an airport. 'Designating' is an expression where, through an Act of Parliament in 1974, there was an agreement with the airport operator that the chief officers of police can recover the cost of policing operations in the early 1970s.
	He continued:
	Perhaps not surprisingly, there has been increasing erosion of the principles whereby costs are recovered by police forces and I think that has led to a bit of a patchwork approach to aviation policing across the United Kingdom.
	I would be interested to hear what the Minister has to say about that. I would also be interested to hear, if police reorganisations are going on at the moment, whether it would make sense to consider the policing and security aspects
	 It being three hours after the commencement of proceedings, Mr. Deputy Speaker  put forthwith the Question already proposed from the chair, pursuant to Order [this day].
	 Lords amendment No. 8 agreed to.
	Mr. Deputy Speaker  then put the Questions necessary to dispose of the business to be concluded at that hour.
	 Lords amendment No. 11 disagreed to.
	 Government amendment (a) in lieu of Lords amendments Nos. 5 and 11 agreed to.
	 Lords amendments Nos. 9, 10 and 12 agreed to.
	Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments Nos. 1, 2 and 4: Mr. Julian Brazier, Mr. Alistair Carmichael, Alan Keen, Mr. Frank Roy and Derek Twigg;Derek Twigg to be the Chairman of the Committee; Three to be the quorum of the Committee. [Mr. Alan Campbell.]
	 To withdraw immediately.
	 Reasons for disagreeing with the Lords amendments reported, and agreed to; to be communicated to the Lords.

Future EU Finances and Own Resources

Geoff Hoon: I beg to move,
	That this House takes note of European Union Documents No. 5973/06, the Commission's revised Proposal for renewal of the Inter-institutional Agreement on budgetary discipline and improvement of the budgetary procedure, No. 6426/06, the Commission Contribution to the Inter-institutional Negotiations on the Proposal for renewal of the Inter-institutional Agreement on budgetary discipline and improvement of the budgetary procedure, and No. 7241/1/06, Draft Decision on the system of the European Communities' own resources (//EC, Euratom); and supports the Government's objective of securing agreement on the Inter-institutional Agreement for the 2007-13 Financial Perspective and the Own Resources Decision in line with the agreement reached by Heads of Government at the December European Council.
	The House will recall that in December 2005 the United Kingdom, in its capacity as President of the European Union, brokered an agreement on an EU budget that many said at the time would be impossible to deliver. In fact, the result was a comprehensive budget for the period between 2007 and 2013, known as the financial perspective.
	EU budget negotiations are inevitably complex, especially when they involve the challenge of doing a deal that works for all 25 EU member states. We were also working in the aftermath of a failed deal somesix months earlier, and in the knowledge that there was a realistic prospect that if we did not secure a deal, it would hold up the development of the accession states and delay a budget agreement by up to two years. In the EU presidency, we were determined to agree a budget that would enable the European Union to deliver for its citizens in the areas where it adds real value, and to make good our commitments to the new accession states.

William Cash: I remember confronting the Minister across the Floor of the House many years ago in different circumstances. Does he agree that the Prime Minister was either severely mistaken or verging on being misleading when he referred to the amount that the taxpayer would haveto find? Does he agree thatas the European commissioner has just announcedthe actual amount is 24 billion above the budget that the Prime Minister announced, which means that the British taxpayer will have to find an extra 2 billion and we will now contribute 44 billion to EU coffers over the next budget period? In other words, it was a mockery.

Geoff Hoon: I am delighted to have the opportunity of renewing the acquaintance that the hon. Gentleman and I established over the course of many debates. I am probably one of the few people in the Chamber who have had the privilege of listening to the hon. Gentleman speak sometimes for as little as two hours. Given the time constraints on this debate, I realise that he may struggle to achieve his normal output.
	The figures quoted by the European commissioner are not normally used as a basis to calculate the EU budget. They reflect a wider assessment of the budget, involving various items that would not usually be considered as part of the negotiation that was achieved in December. I do not say that simply on behalf of the UK Government; the position is widespread across the EU. The figures mentioned by the commissioner involved many aspects of EU expenditure not normally counted as part of the EU budget.

Kelvin Hopkins: I welcome my right hon. Friend to his new post. He portrays the deal as a success, but was it not a golden opportunity for Britain to use its leverage to secure fundamental reforms to the European budget? Could we not have reached an historic, positive agreement to change the budget, rather than brokering a deal that will cost Britain much more and not reform the budget?

Geoff Hoon: I am sorry that my hon. Friend is so critical. I know how keen he is on the redistribution of wealth. I should have expected him to say what a good deal this budgetary arrangement is for a relatively wealthy country such as the United Kingdom, with its great economic success, and to refer to the UK's opportunity to use its influence to persuade all EU member states to recognise their obligations to some countries that are significantly less well off and ensure that the budget assists them in their development.

Kelvin Hopkins: Does my right hon. Friend not agree that redistribution currently benefits richer countries as a result of the perverse effects of the common agricultural policy? Will not our deal help the countries that benefit most from the CAP, such as Denmark, France and Ireland?

Geoff Hoon: That is precisely what the deal changes. I should have thought that, having examined the detail, my hon. Friend would be very pleased at the way in which his Government negotiated an excellent deal for the countries that are only just joining the EU, and benefiting from the opportunity.

Several hon. Members: rose

Geoff Hoon: I seem to have excited a lot of people, but I give way to my hon. Friend the Member for Leicester, East (Keith Vaz).

Keith Vaz: I am most grateful. I too warmly welcome my right hon. Friend back to the Foreign Office as Minister for Europe. I know that he will perform his task with great distinction, as he did when he last held the post.
	Does my right hon. Friend not agree that, although we have great affection for my hon. Friend the Member for Luton, North (Kelvin Hopkins) when he speaks on European issues, he misses the point about the deal? Britain has been the champion of enlargement. Indeed, when my right hon. Friend last held his current post he pushed forward the enlargement agenda. It is only right that we agreed a deal to help the new countries that have joined the European Union.

Geoff Hoon: I am grateful for my hon. Friend's kind words and even more grateful for his observations, with which I entirely agree.

Richard Shepherd: Will the Minister confirm that the deal requires primary legislation in the House, and can he give us an idea of when that is likely to happen, given the time scale?

Geoff Hoon: Were I still Leader of the House, I might be in a better position to answer that question.

Mark Pritchard: I welcome the Minister to his new role, but I shall miss him on Thursday mornings.
	Have not the Government given away more British taxpayers' money, both in net terms and in terms of a reduced rebate, without benefiting from reciprocal reforms of EU finances?

Geoff Hoon: That is not the case. I shall deal with those points in due course, but the deal is hugely successful for both the United Kingdom and the European Union. I think that ensuring that all the different elements were put in placenot least, in a European Union of 25 member states, a commitment to long-term reformas well as being fair to the new member states constitutes a tremendous success.
	I hope that the hon. Gentleman will forgive me for being party-political for a moment. His party strongly supports enlargement, and I should have expected itto show equally strong support for the willing of resources to allow that enlargement to be successful. That is precisely what this deal does.

Charles Walker: If this was such a fair deal for Europe, why was France so happy with the outcome?

Geoff Hoon: When I was at the Ministry of Defence, there were a number of rather large oil paintings depicting Britain's great victories over France in the past. I would hope, however, that in the 21st century it was important for us to work closely with our nearest neighbour, as well as other members of the European Union. Certainly France was happy, and I am sure that that was because of the extremely effective negotiating skills of Britain's Ministers.

Ian Davidson: Along with many others, I congratulate the Minister on his new position. May I point out to him, however, that he has a very hard act to follow? Within days of taking the post of Minister for Europe, my right hon. Friend the Member for Paisley and Renfrewshire, South (Mr. Alexander) had managed to get the French and the Dutch to vote against the European constitution, thereby destroying it. Can we expect similar activity on the part of this Minister in relation to the European budget?

Geoff Hoon: I always enjoy the congratulations of my hon. Friend, although I have also sometimes lived to regret them. I am not planning to be as spectacularly successful as my right hon. Friend the Member for Paisley and Renfrewshire, South (Mr. Alexander) was in this area.

David Taylor: Does my right hon. Friend accept the figuresfor the five complete years between 2000 and 2004, which show that Britain's net contribution to European institutions was some 4.6 billion a year, and that, in the seven years of this deal, the contribution will be some 10.6 billion? Is that not a very substantial rise, and is he happy that the budget's make-up reflects the EU's priorities? In most areas of life and inmost organisations in societies and economies, large budgets are shaped to reflect the priorities of such organisations. However, this is still substantially an agricultural budget, is it not?

Geoff Hoon: A significant element of agricultural spending is still involved, which is why it was important to agree a process for reforming further the common agricultural policy. It is important that my hon. Friend put into context his figures for the United Kingdom. We are talking about a financial perspective for 25 EU member states that stretches well into the future. We need to achieve such an agreementmy hon. Friend will forgive me for repeating this pointin the context of a number of new member states whose economic progress and development was, frankly, far behind that of existing member states. Crucially, it is in our and all other member states' interest that the new ones be able to develop in the way that this budget allows for.

John Bercow: I welcome the right hon. Gentleman to his new responsibilities, and I hope that we find the exchanges with him on these matters every bit as stimulating as his leadership of the House and of the business statement repertory company. Assuming that he welcomes and endorsesthe Commission's contribution to the institutional negotiations on the budget agreement, does he think it practical to hold out a realistic prospect of the EU's accounts being signed offfor onceby the European Court of Auditors?

Geoff Hoon: I recognise the historical difficulties associated with being positive about that aspect of EU finances. The hon. Gentleman asks whether I hold out a realistic prospect of dealing with this issue. I am always hopeful, but the member states and the EU institutions need to work together to deal with fraud, in particular, which has been a problem for many years, largely because we have not had the necessary co-ordination between institutions and member states. I am confident that the co-operation that we have seen in recent timesnot least in agreeing this budgetwill lead in that direction, so, yes, I am hopeful, but at the moment, no, there is no realistic prospect hope of achieving the aim that the hon. Gentleman refers to.
	The budget agreed in December has four key elements. First and crucially, it supports economic development in central and eastern Europea cause that the United Kingdom has consistently championed, and for which we should rightly pay on the same basis as others. The agreement provides an unprecedented transfer of receipts to the poorest member states of central and eastern Europe. Such transfers will provide the basis for economic development in those member states, making them and the EU more prosperous. Secondly, the rebate remains on all expenditure except economic development in the new member states. Thirdly, the total rebate over the next financial perspective will actually be larger than in the current period.
	Fourthly, the December agreement is fair. For the first time in the history of our membership of the EU, we have rough parity with France and Italy in terms of net contributions. I repeat: at every stage of the negotiation, this Government made it clear, here and in Brussels, that the UK abatement remains fully justified because of our disproportionately low level of EU receipts. Without the abatement, the UK would have paid, net, 10 times as much as Italy and 13 times as much as France over the last decade. It is therefore absolutely right that under the agreement reached in December, the UK abatement remains and will in fact be worth more than in the current budgetary period.
	It is also important, however, that the UK pays its fair share of the costs of enlargement in return for the economic, political and social benefits that enlargement brings. That is why we agreed that spending on economic development in the new member states could gradually be disapplied from the abatement calculation from 2009. But we were also clear that the UK would not pay more than its fair share, which is why the UK abatement will be applied in full on all expenditure in the 15 original member states, and on CAP expenditure everywhere in the EU.
	Overall, under the December agreement, the UK will go from paying two and a half times more than France and Italy over the last decade to paying roughly the same, net, as those countries as a proportion of national income, for the first time since we joined the EU. That is a good and fair result for the UK and, indeed, for our EU partners. Agreement on the budget deal is only the beginning of a process to ensure that the EU has a more rational and logical budget that more effectively supports the EU's longer-term aims. This Government's arguments in favour of budget discipline have resulted in agreement to an effective and controlled budget that focuses on the EU's priorities. Overall, expenditure as a share of EU income willfall to some 1 per cent. by 2013the lowest level in20 years. Yet within this disciplined budget, sufficient funding is guaranteed across the range of theUnion's priorities, such as competitiveness, research and development, freedom, security and justice, and development assistance.
	The package agreed under the UK presidency also contains a number of modernising elements. It offers member states the opportunity to shift money from CAP direct payments and market support to rural development, and creates a globalisation adjustment fund to help re-skill workers who lose out as a result of structural economic change. Furthermore, the agreement provides for a fundamental review of all aspects of the budget, on the basis of the Commission's 2008-09 report, on which the Council can take immediate decisions. That sets the path towards a modern budget fit for the 21st century that responds to the challenges of globalisation.
	Since December, negotiations have continued between the European Parliament, the Commission and the Council on an inter-institutional agreement for the next financial perspective. This is a usual feature of the EU's multi-annual budget process, and it is necessary for the expenditure side of the December deal to come into effect. That debate continues the parliamentary procedure to endorse the IIA. The Government's prime objective in the IIA negotiation has been to ensure that it retains the main elements, and therefore the main benefits, of the December deal. The EU institutions reached provisional agreement on a new package last month. Overall, that agreement meets the Government's objectives and, subject to the agreement of this House, should establish the spending priorities agreed in December. It is due to be formally approved by EU Ministers on 15 May.
	Under the provisional agreement, the basic structure of the expenditure side is maintained, with an additional 2 billion of expenditure within the financial perspective ceiling and a further 2 billion of expenditure outside the financial perspective. Such additional funding is broadly comparable with the level agreed in the context of the 1999 IIA negotiation, and it will be set aside for priority areas supported by this Government, such as competitiveness and external action. It will result in an overall expenditure ceiling of 864 billion over the seven-year period.

John Bercow: Bearing in mind the right hon. Gentleman's considerable authority on matters European, and leaving aside the specific issue of fraud by European Union institutions, what assessment has he made of the serious phenomenon whereby large sums of money given by the Union in humanitarian aid for Zimbabwe, for example, are wasted through currency manipulation? Does the Union have a plan to address that phenomenon when dealing with rogue states?

Geoff Hoon: The hon. Gentleman, as ever, raises an importantand disturbingissue that clearly needs to be investigated further. Indeed, it demonstrates some of the difficulties that have to be faced in tackling fraud. The essential problem remains, in that, although the institutions often will the money and the direction in which it should go, they do not always directly supervise how it is spent. Frankly, if it is put into other people's hands, accountability is not as good as it could, or should, be. We are determined to tackle that issue, and there is much greater recognition than ever before that it requires the co-operative approach that I described earlier.

Mark Pritchard: The right hon. Gentleman will of course be aware that the European constitutional treaty deals with European institutions. Will he take this opportunity to dismiss the comments of Prime Minister Prodi, who suggested that the European constitutional treaty might be revived?

Geoff Hoon: I was wondering whether I would get through my first debate without uttering the words European constitutional treaty. I am grateful for the opportunity to say those three words, but I cannot see how they are relevant to our debate this evening. I congratulate the hon. Gentleman on his initiative in introducing the issue and I look forward to debating it at some stage, when it is more relevant than it is tonight. We are all agreed about where the treaty is now, and we can debate it in future when we know where it is going, if indeed it is going anywhere.
	The provisional agreement also achieves the Government's objective of retaining the existing flexibility instruments without increasing the amounts allocated to flexibility, or changing the institutional balance necessary to use the instruments. The provisional agreement includes no increases in the annual flexibility instrument, no increase in the solidarity fund, and no increase in the emergency aid reserve.
	Finally, the provisional IIA contains a number of elements related to improving the financial management of EU funding. The Government welcome those measures and, although they do not have to be part of the IIA, support their inclusion in the text.
	In addition to negotiations for a new IIA, negotiations are also now under way between EU member states for a new own resources decision, which will set out the financing arrangements for the new financial perspective. Once again, the Government's primary objective is to ensure that the own resources decision fully reflects the agreement reached by the European Council in December. For the reasons that I have mentioned, that agreement represents a good and fair result for the UK and underlines the concept of using net balances in assessing relative contributions to the EU budget. Crucially, the own resources decision must retain the balance of net positions achieved in December, and ensure that the measures introduced to make the EU financing system simpler and more disciplined are preserved.
	In summary, the agreement reached by the European Council in December is a good deal for the UK and a good deal for the EU. It provides a fair and effective budget, focused on priorities, with a broadly stable expenditure ceiling, and rightly provides a foundation for economic development in the new member states. It also sets the path to fundamental reform, which should equip the EU with a modern, effective budget that meets the needs of its citizens and represents a modern Europe. I commend the agreement to the House.

ROYAL ASSENT

Mr. Deputy Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Act:
	Northern Ireland Act 2006

Future EU Finances and Own Resources

Question again proposed.

Graham Brady: First, I congratulate the European Scrutiny Committee on the excellent work that it does, frequently without the credit that it deserves. If it were not for its recommendation, the House would not have this opportunity to debate a matter that is of real and pressing concern to the country.
	It is however regrettable that we do not have a full day for this important business and our debate will necessarily be truncated, not something for which the Minister for Europe could normally be expected to take responsibility, but as he was responsibleas Leader of the Housefor scheduling this week's business, it is entirely down to him on this occasion. Nonetheless, I am delighted to see the Minister in his place. There have been times since Friday when I was worried that he might not be joining us, but I am very pleased to welcome him to his new job, or should I say back to his old job. I hope that he stays in the brief for longer than the three months that he managed before, all of which fell during the summer recess of 1999.
	In the less than two years that I have been shadowing Europe, he is already the third holder of his portfolio. Indeed, there has been no more consistency in personnel than there has been in the Government's European policy, which has variously been: in favour of the euro and against it; certain that a constitution for Europe was unnecessary and passionate in its belief that an enlarged EU could not function without one; determined to secure fundamental reform of the common agricultural policy, but happy to let months of the British presidency slip away without even tabling a proposal for change; and steadfast in defence of the British rebate, and yet prepared to surrender it while gaining nothing in return.
	It will be interesting to see whether the new Minister follows the avowedly integrationist agenda of the current Prime Minister or the apparently more sceptical tone of the next one. His longevity in office may depend on him making the right decision. This debate is a welcome opportunity for the House to examine the shambolic events of the last 12 months as the Government have not only failed to achieve their targets, buthaving conceded an unnecessarily costly budget deal in Decemberhave flaccidly observed as the cost has escalated and the assurances they gave to British voters have proved worthless.
	The experience of the British EU presidency and of the budget negotiations has been sadly typical of the utter incompetence of this Labour Government. It all started so well, as so often, with the Prime Minister's speech to the European Parliamenta speech about a crisis of political leadership. Well, he should know that when he sees it. He spoke stirringly of the need to reconnect Europe with its peoples, and he spoke of a moment of decision. He also set out Britain's bottom line for the budget negotiations, linking any reduction of the British rebate to fundamental reform of the CAP and saying in terms that
	we cannot agree a new financial perspective that does not at least set out a process that leads to a more rational budget.
	He spoke of the rejection of the EU constitution by two referendums as a wake-up call. He said:
	It is time to give ourselves a reality check.
	But like all the Prime Minister's promises, all that has come to nothing and the ambition of his rhetoric serves only to emphasise the scale of his failure and of the massive opportunity that he has missed.
	The Minister spoke about the need to finance enlargement. As he said, the Opposition have always strongly supported enlargement, but the necessary funds for that process should have come from reductions in the bloated CAP budget, not from growth in the overall budget.
	At the beginning of their presidency, the Government set out to achieve three thingsto contain the overall size of the EU budget, to achieve fundamental reform of the common agricultural policy and to protect Britain's budget rebate, at least until such a fundamental revision of the CAP was agreed. None of those objectives was secured.

Keith Vaz: The hon. Gentleman said that the Opposition supported enlargement, although they called for a referendum on the Nice treaty, which gave rise to enlargement. Bearing in mind that there was no fundamental review of the CAP, will he not accept that the budget was the best deal in the circumstances to ensure that the new countries would be properly financed?

Graham Brady: Absolutely not. I am delighted to welcome another former Minister for Europe to the debate, but the Prime Minister's speech to the European Parliament at the outset of the British presidency made it clear that a better deal could be obtained, and that was his objective. However, it was not secured.
	The EU budget is rising. The common agricultural policy has not only gone without fundamental reform, but is actually getting bigger. According to last December's joint report from the Treasury and the Department for Environment, Food and Rural Affairsthen under the leadership of the new Foreign Secretarythe CAP will leave the EU economy some 100 billion poorer over the next financial perspective 2007-2013, with a further 100 billion cost to consumers every year, in a combination of taxes and inflated food prices. That amounts to an average cost for a family of four of around 950 a year, and that cost will be far higher for families in the UK, as a major net contributor.

Ian Davidson: The hon. Gentleman pointed out that the Government failed to achieve any of their three objectives, but at least that has the merit of consistency. What is the Opposition's position? Will they vote against accepting this budget, and which other right-wing parties in Europe support that position?

Graham Brady: The hon. Gentleman always has the merit of consistency of course, and I hope that I do, too. We oppose the budget, we think that it was a bad deal for Britain and we will be opposing it. The cost to consumers will be enormous.
	The Prime Minister told this House in July that he wanted to get rid of the CAP, but in fact it will increase from 40 per cent. of the EU budget now, to 44 per cent. under the new arrangements. The Chancellor of the Exchequer said last September:
	If we are to make poverty history, let us seek to make the excesses of the CAP history.
	Far from ending the excesses of the CAP, the Prime Minister agreed to a deal that increased its costs considerably. Billions more euros will be spent on protecting and sheltering inefficient and counter-productive agricultural subsidies.

Wayne David: Does the hon. Gentleman acknowledge that the new financial perspective agreement is very good news for some regions of the United Kingdom? West Wales and the south Wales valleys will receive about 1.2 billion in cohesion funding. Is that not good news?

Graham Brady: I am delighted to hear that south Wales will do well from the funding, but the hon. Gentleman must be awareas we all should bethat it is British taxpayers' money; it is simply being recycled through EU institutions, losing administrative costs meanwhile. It would be far more efficient, as I think the Chancellor of the Exchequer believes too, to pay the money directly, and I do not see why we cannot look into doing that instead.
	Given all those issues, no wonder the Prime Minister identified the urgency of reform, but how shocking that reform has not been addressed. Not only did the Prime Minister fail to secure real reform of the CAP, but having linked the future of the British rebate to that reform he gave up 7 billion of the rebate while getting nothing in return. That 7 billion alone is equivalent to the total annual budget for policing in England and Wales.
	The surrender on the rebate is only a small part of the increased cost to British taxpayers, however; the net cost of our payments to the EU will increase by far more. At present, we pay in about 2.8 billion a year more than we get out. Under the deal agreed in December, that net cost almost doubles to 5.5 billion every year. Furthermore, as the hon. Member for Luton, North (Kelvin Hopkins) pointed out, those funds do not always go to the most deserving places. Under the new financial perspective, we will pay in a fifth more than the French, but we shall get back only half as much. Per capita EU spending in the UK will be a quarter of the figure in Ireland and will be lower than in any of the other, soon to be 27, member states.
	Remarkably, the expensive new Foreign Office booklet, Guide to the European Union, which cost taxpayers a further 80,000 to produce, notes thatthe existing net cost is 3 billion a year[ Interruption.] The hon. Member for Leicester, East (Keith Vaz) is clutching his copy, so at least somebody was waiting for it to arrive on their doormat.
	The booklet makes no mention, however, of the fact that the cost is set to double from 2007.

Mark Pritchard: Can my hon. Friend advise us of the likely cost of reprinting the brochure, as we now have a new Minister for Europe?

Graham Brady: I shall table a written question as soon as I have an opportunity.

Geoff Hoon: I am reflecting on some of the hon. Gentleman's rather exaggerated figures for the UK's net contributions. In the period up to 1997, in the days when I debated at length with the hon. Member for Stone (Mr. Cash), I was well aware of the arguments he used to put to the then Government Treasury Bench. Presumably if the hon. Gentleman is consistent, he will argue that the situation that we inherited was catastrophic and that since 1997 there has been a huge improvement in the relative contributions made by the UK, especially in relation to other member states. If the hon. Member for Altrincham and Sale, West (Mr. Brady) is still critical of that imbalance, he will be extraordinarily critical of the one person who unites most Opposition Membersthe Baroness Thatcher.

Graham Brady: I am clear and consistent; I want to see the British net contribution going down, not up. This deal doubles it, which is bad for British taxpayers.
	No wonder the Chancellor was furious; no wonder he thinks he would have done a better jobit would be hard to have achieved a worse deal for Britain and British taxpayers. The total budget is rising, the cost of the CAP is rising, the rebate is being cut and Britain's net contribution is doubling.

William Cash: Is not it the case, as significant media coverage suggested at the time, that the Chancellorwas actually not consulted about the final deal? Furthermore, he will be handed a poisoned chalice, if of course he ever manages to get hold of it.

Graham Brady: Perhaps the Financial Secretary will shed light on that point when he replies to the debate, because he has been much closer to such matters. There has been considerable speculation that the Chancellor was kept in the dark throughout the process of agreeing the budget, even though he will have the task of trying to find the funds if the Prime Minister remains in office. Of course, if the Chancellor were to become Prime Minister, he would face a significant challenge.

John Bercow: May I put it to my hon. Friend that the concerns expressed a moment ago by our hon. Friend the Member for Stone (Mr. Cash) are reinforced by the fact that although the new Economic Secretarythe Chancellor's representative on earth, the hon. Member for Normanton (Ed Balls)was in the Chamber for the start of the debate, he did not stay for very long?

Graham Brady: My hon. Friend raises an important issue. It is also interesting to students of Kremlinology that the Chancellor's other representative on earth was the previous Minister for Europe, but I am not sure what the significance of all those movements is. Thankfully, that is a matter for others.
	Everything I have described was clear in December, when it looked as though the Prime Minister had managed to reach the worst possible deal for Britain, but the picture has grown steadily worse since, with British Ministers giving away their strongest cards, apparently powerless to stop a further collapse in our negotiating position. In February, the then Minister for Europe submitted an explanatory memorandum that set out the Government's approach to the negotiation of the inter-institutional agreement, stating their priority that the agreement
	fully reflects the deal reached in December
	and that,
	the Government will strongly oppose any proposals during the negotiation of an agreement to increase the overall expenditure ceiling...given the delicate nature of the compromise reached in December, the Government does not see the scope for re-allocation of spending between different expenditure headings.
	However, despite the Government's supposedly strong opposition, the European Parliament was able to push through a further 2.68 billion increase in the budget last month and, as has already been mentioned, the Budget Commissioner has suggested that the picture is actually worse than had previously been acknowledged due to the fact that a further 24 billion in various financial instruments is being accounted for outside the EU budget total.
	To make matters worse, the British Treasury has changed the way in which it presents payments to the EU, making it impossible to make direct comparisons between past and future years. Given that  The Sunday Times reported a source saying of the EU Budget deal that
	The Treasury is quietly fuming...we have ended up giving away much more than we expected and with precious little to show for it in return ,
	the changes in the presentation of the figures may be to cover the Government's embarrassment.

Philip Dunne: I am intrigued to hear the words of the current Minister's predecessor, which my hon. Friend has just revealed to the House. Can my hon. Friend reconcile that statement with what we have heard from the new Ministeror rather, the retread Ministerwho described the settlement as disciplined, fit for purpose and truly accountable? Can my hon. Friend explain that?

Graham Brady: Like my hon. Friend, I am afraid that I cannot explain it, but I shall be interested to hear whether the Minister can.
	The escalation of EU budgets and the continuing expansion of the CAP are an even greater cause for concern, because, as my hon. Friend the Member for Buckingham (John Bercow) has pointed out, we are approaching the shameful 12th year for which the EU Court of Auditors has been unable to sign off the European Union's accounts as reliable and free of fraudagain a massive opportunity missed by the British presidency when this country could have insisted on proper financial controls before a new budget, let alone a bigger budget, was agreed. Instead of the root and branch reform of accounting practices that is needed, the IIA simply assures us that
	the Budget will be implemented in a context of sound financial management based on the principles of economy, efficiency, effectiveness, proportionality of administrative costs
	and so on.
	There is no recognition of the scale of concernabout the EU's existing budget. There is no apparent understanding of the profound lack of confidence that people feel as to whether their money is being used as it should be. In the European Parliament a year ago, the Prime Minister struck a visionary note. He said:
	In my time as Prime Minister, I have found that the hard part is not taking the decision, it is spotting when it has to be taken.
	He may have said the same to the parliamentary Labour party this evening. He continued:
	It is understanding the difference between the challenges that have to be managed and those that have to be confronted and overcome. This is such a moment of decision for Europe.
	The Prime Minister was right: the British presidency was a remarkable opportunity to confront the things that are wrong with the EUthe growing budget, the common agricultural policy, the lack of adequate financial controlsbut all those chances were missed, leaving no one very impressed. The German press said that the Prime Minister had
	started the British Presidency as a tiger and finished as a doormat.
	President Chirac was reported as telling friends presciently that the presidency could not perform effectively until the Prime Minister and the Chancellor of the Exchequer
	resolve the crisis of leadership and one of them comes out on top.
	Even the former Minister for Europe, the right hon. Member for Rotherham (Mr. MacShane), voiced his disquiet with the way things were going when he told  The Daily Telegraph:
	Even out and out pro-Europeans like me could not accept a one-sided deal that only moves on the rebate. That would be very difficult to get through.
	Well, a one-sided deal is what we have before us.
	The British people want a European Union that does less and costs them less; they want to get rid of an agricultural policy that costs their families 1,000 a year in higher food prices and all their instincts of fairness want rid of a system that puts the interests of wealthy farmers in France ahead of those of poor farmers in the developing world. Last June, the Prime Minister set out to secure a deal that would achieve all that. Instead, he agreed to the opposite, and the papers before the House this evening describe that failure: a deal that leaves the EU's accounts unreformed, that sees the CAP secure for a further six years and that will cost British taxpayers more while giving them nothing in return.
	Members have a choice this evening either to endorse failure or to send a signal that they really want to represent the interests of their constituents and that they expect a British Government to work for real reform in Europe and to fight for the interests of British taxpayers. It is a chance for hon. Members to show that we are in touch with the views of our constituents, even if the Prime Minister is not.

Keith Vaz: It is always a pleasure to follow the hon. Member for Altrincham and Sale, West (Mr. Brady). I have heard his speech before. The Minister for Europe has just taken up his position and the last time that he had it, of course, was in 1999, so he has not had the pleasure of hearing the hon. Gentleman speak on European issues. His entire speech consists of describing Britain's contribution to Europe as a failure. Not once did he put forward any proposal on what the Conservative party feels on these issues.

Graham Brady: I am afraid that I must correct the hon. Gentleman on that point. I do not regard Britain's contribution to Europe as a failure; I regard the Prime Minister's contribution to the negotiations for a new budget as a abject failure.

Keith Vaz: The hon. Gentleman says that whatever the Prime Minister does in the EU, so it is not a surprise.
	I welcome my right hon. Friend the Minister for Europe back to a job that he did so well. I succeeded him as Minister for Europe. This is not a bid for his job. He was there for three months. I knew that he would come back, so I left his telephone in exactly the same position he left it in, with the same numbers on the speed dial. I know that he will find that his return to that post will enable him to push forward the European agenda.
	I pay tribute to my right hon. Friend the Secretary of State for Scotland for the work that he did in that post. I know that my hon. Friend the Member for Glasgow, South-West (Mr. Davidson) believes that my right hon. Friend was responsible for scuppering the European constitution. I do not for one moment believe thathe did so. He conducted himself extraordinarily well during the presidency, as the did my right hon. Friend the former Foreign Secretary, now Leader of the House. It is important that a real heavyweight has the job of Minister for Europe. As I said in my letter to The Times today, I believe that we should go one step further and have a dedicated ministry for European affairs within the Foreign Office, with a Cabinet Minister of the stature of my right hon. Friend, so that we can continue to monitor the EU and hold it accountable for its work.

Mark Pritchard: I am sorry that I missed the hon. Gentleman's letter to  The Times todayI must have read  The Daily Telegraph for a changebut I wonder whether he agrees that the House should be concerned when Prime Minister Prodi suggests that the European constitutional treaty should be revived.

Keith Vaz: No, because that has always been Romano Prodi's position. Since he was the President of the Commission when the constitution began, I am not at all surprised that he decided to say that, following his election as the Prime Minister of Italy; but this debate, of course, is not about the European constitution, although it is timely, because the Commission will publish its response on Wednesday to the period of reflection on the constitution. We look forward to reading what it has to say. It is important to reach a conclusion on that very wide issue, which is a concern for hon. Members and, therefore, for members of the public as well.

John Bercow: The hon. Gentleman is both a Europhile and a humanitarian. Will he tell the House whether, in all candour, he thinks it acceptable to approve a budget that continues to allow the EU to spend 64 billion a year on trade-distorting domestic agricultural support, the effect of which is to exacerbate the plight of the most destitute people on the planet?

Keith Vaz: I am most grateful for the hon. Gentleman's intervention, because I have enormous respect for the way in which he campaigns on third world poverty, and I agree that the issue must be resolved. I do not believe that we could have resolved it during our presidency. It takes longer than six months to resolve such fundamental issues, but we need to ensure as we continue to campaign on European issues that we put matters right, because it is inappropriate in this day and age to spend so much basically propping up French agriculture at the expense of farmers not just over the rest of the EU, but in the third world.
	The hon. Member for The Wrekin (Mark Pritchard) mentioned the new document published on 5 May. It does not have to be reprinted, because it does not contain a photograph of the last Minister for Europe, although I made sure, when I was Minister for Europe, that my photograph was included in the documents.I think that it contains a photograph of the hon. Member for Stone (Mr. Cash) on page 30at least, the back of his headand he appears to be entering some kind of starship on the way to another planet, although I do not want to be nasty to him, because he will celebrate his birthday, I think, on Wednesday,while the hon. Member for Twickenham (Dr. Cable) will, incidentally, celebrate his on Tuesday. Todayis Schuman day, when members of the European Commission can have the day offit is a public holiday. I am not suggesting that we should have a public holiday for the birthday of the hon. Member for Stone, but I am making a serious point. The document is important, because it is absolutely vital that we explain to the British public what happens not only to the money that the Government spend, but to the money that the EU spends.

Several hon. Members: rose

Keith Vaz: An amazing choice is before me; I must first go for the birthday boy.

William Cash: The former Minister for Europe asks about where the money goes, which provokes an immediate outburst of enthusiasm among Conservative Members. May I point out that, in respect of the European agricultural guidance and guarantee fund, there were irregularities of 82 million in 2004 and that, on structural measures, irregularities for that year totalled 531 million?

Keith Vaz: That is totally unacceptable. It is absolutely right that the Court of Auditors should be satisfied about how public and European money is spent. I am sure that Ministers and their colleaguesnot just in the Treasury, but in other Departments and those who represent the Foreign Office, such as my right hon. Friend the Minister for Europewill ensure when they go to European meetings that they will continue to do what British Ministers from parties on both sides have done in the past, which is to do their best for Britain.

Philip Davies: Does the hon. Gentleman not think the pattern of events extraordinary? Each year, the Court of Auditors refuses to sign off the European Union accounts and, each year, the British Government give more and more money to the European Union. Does he not think it quite extraordinary forany Government or body to give more and moremoney to an organisation where the accounts cannot be signed off?

Keith Vaz: It sounds a daft thing to do, but we have entered into obligations and need to make sure that we fulfil them. However, that does not derogate from the fact that the Court of Auditors has made it clear that there are problems with the accounts and that British Ministers have to make sure that the European Union is held to account for what has happened.

Daniel Kawczynski: I must pick up the hon. Gentleman on the pointmade by my hon. Friend the Member for Buckingham (John Bercow) about the huge subsidies that the European Union uses to block free and fair trade with the rest of the world. My hon. Friend and I attended the World Trade Organisation talks in Hong Kong in December and, as a British delegate, I felt deeply embarrassed by the number of African and Asian delegates who came to see me who were absolutely appalled at the way in which the European Union was behaving. When is the European Union going to address that?

Keith Vaz: The hon. Gentleman asks me the question as though I speak for the European Unionof course I do not. When British Ministers go to summit meetings or have meetings with their colleagues in the European Union, they do what is in the best interests of this country, as they have done for the past 20 years, whatever their party. That is what our Ministersdo at the moment, as they did under previous Administrations. It is important that we continue to campaign on those points.
	The hon. Gentleman reminds me of the importance of the deal entered into during the negotiations under our presidency. He makes a lot of his Polish origins. I have read some of his speeches, but not all of them. He frequently tells the House how important it is that his family came from Poland and that he lives in the United Kingdom, where he was born. That reminds me of the importance that we placed on enlargement. We agreed the deal last December because we are the champions of enlargement. We could not have been left in a position where the new member states that joined on 1 May 2004 could not fund the enlargement process.
	The hon. Gentleman will know from the opinion poll that has just been published that support for the European Union has declined among the people of Europe. I think that it is down to 39 per cent. I know that my hon. Friend the Member for Glasgow, South-West will think that that is because of the tenure of a former Minister for Europe, but it is a major problem. In a country such as Latvia, which has just joined, the approval rating is down to 29 per cent. That is a pretty sad state of affairs. It means that we have not effectively communicated with the people of Europe about the benefits of their country being in the European Union. That is why publications such as the one that I mentioned are important and why it is important that we spend money on such publications, even if they include a back-of-the-head photograph of the hon. Member for Stone.

Kelvin Hopkins: When a nation disapproves of an institution, could it be that there is something wrong with the institution, and not just that we have not sold it very well?

Keith Vaz: That may be so. My hon. Friend has a very principled position on these issues. He wants to withdraw the United Kingdom from the EU [ Interruption. ] I am not sure whether that agreement came from the Conservative Front Bench and represents official party policy. My hon. Friend wants to withdraw

Kelvin Hopkins: indicated dissent.

Keith Vaz: I am glad to see that my hon. Friend does not believe that we should withdraw. If he believes that we should remain in the European Union, we should continue to ensure that we use our position to campaign effectively for what is best for the people of this country.

Ian Davidson: Like my hon. Friend the Member for Luton, North (Kelvin Hopkins), I do not believe that Britain should withdraw from the European Union. I accept the point made by my hon. Friend the Member for Leicester, East (Keith Vaz) that we ought to be campaigning for what we want to see, but does he not accept that the way in which Britain conceded, virtually entirely, on the common agricultural policy was a complete abandonment of our responsibility? He almost suggests that we alone were in favour of enlargement and the only way in which we could get anyone else in continental Europe to accept enlargement was to stuff their mouths with gold. Surely that is not the case. Many others were in favour of enlargement, and we capitulated far too easily.

Keith Vaz: I know that my hon. Friend is speaking in the blunt Glasgow tones that he has always used, but we have stuffed nobody's mouth with gold. The deal was the one that we entered into as the champions of enlargement.  [ Interruption. ] I see that my right hon. Friend the Member for Rotherham (Mr. MacShane), another former Minister for Europe, has just entered the Chamberwe have a former Ministers for Europe club here. Like me, and all who have occupied the position, he pushed the enlargement agenda forward. Many countries wanted to prevent enlargement, as we know from the fact that, even during the presidency, there was an attempt to prevent the opening of negotiations with Turkey. Various deals were done to ensure that that happened.
	We did drive the process forward and should be proud of the new countries that joined the European Union on 1 May 2004, because contrary to what Members on the Conservative Front Bench have saidI do not hold the hon. Member for Chipping Barnet (Mrs. Villiers) responsible because she was not an MP at the time, but I do hold the hon. Member for Altrincham and Sale, West responsiblethere has not been chaos or a shambles. Conservative Front-Bench Members predicted that those who came to this country following 1 May 2004 would clog up our benefits system, but the latest report from Ernst and Young suggests that the arrival of people from the new member statespeople similar to the ancestors of the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski)has benefited the British economy.

Mark Pritchard: The hon. Gentleman is absolutely right to suggest that Britain has benefited from many people from many different European Union countries. However, he refers to the figures. Was is not the case that the Government suggested that there would be 13,000 new entrants to the United Kingdom, when, in fact, the figure is more like 132,000?

Keith Vaz: So what? Those people have contributed enormously to our economy. According to the Ernst and Young report, those who have come from Poland, Hungary, Lithuania, Latvia and all the other countries have contributed to our economy and kept interest rates down. Some can even be found assisting the refurbishment of the property of the leader of the UK Independence party, Mr. Roger Knapman, who wanted to stop them coming into the United Kingdom.

John Bercow: On a point of order, Madam Deputy Speaker. I seek your guidance. It is obviously important that accurate information should be vouchsafed to the House. It seemed to me, in all innocence, inherently improbable that my hon. Friend the Member for Stone (Mr. Cash) would be depicted favourably, or at all, in a publication from the Foreign Office. I have scoured it, hither and yon, and he ain't there.

Madam Deputy Speaker: I note what the hon. Gentleman says, but he will know that that is not a point of order for the Chair.

Keith Vaz: I accept your ruling, Madam Deputy Speaker. However, I ask the hon. Member for Buckingham (John Bercow) to turn to page 30 of the document. The person must be the twin brother of the hon. Member for Stone since no other Member of the House than he would want to go on that star ship to Mars.

Madam Deputy Speaker: Order. Before we get any further confusion about who is, or is not, on page 30, can we please continue with the debate?

Keith Vaz: I will certainly try to do so, Madam Deputy Speaker.

Daniel Kawczynski: rose

Keith Vaz: I will not give way because I have been generous in giving way to hon. Members on both sides of the House.
	Negotiations on budget deals are extraordinarily difficult, and I think that the Prime Minister, the former Foreign Secretary and the former Minister for Europe deserve our thanks for ensuring that there was a deal. Whatever the hon. Member for Altrincham and Sale, West says from the Front Bench, there nearly was not a deal, and that would have left the European Union in crisis. The deal was the best that we could get, based on the information available and what the Prime Minister could get out of other countries, because such things are all a question of negotiation.
	The way to ensure that there is more wealth in Europe to be shared among the 25 countriesor27 countries, if Romania and Bulgaria join next year or the year afteris by meeting the criteria set down in Lisbon in 2000. As the Financial Secretary to the Treasury will no doubt tell us when he winds up, we have made enormous progress on the Lisbon agenda. The latest report by the Centre for European Reform, which was published only two weeks ago, showed that we are now the fourth-best performing country in Europe as far as the benchmarks for the Lisbon agenda are concerned. However, we heard no praise from the hon. Member for Altrincham and Sale, West, just criticisms about failure and an ability to push forward the reform agenda. France and Germany are eighth and ninth. We have met our targets on employment and are meeting our targets in other areas. The way in which we can ensure that Europe will be more prosperous is not necessarily by taking more money from the countries of the European Union, but by ensuring that we meet the targets set out at Lisbon. If the whole European Union becomes richer and we ensure that we meet our employment targets and that people have jobs in the European Union, the freedom of movement that is essential to the way in which Europe progresses will enable us to make sure that there is even more money available to spend on areas such as south Wales, where my hon. Friend the Member for Caerphilly (Mr. David) is keen to receive European funds to regenerate his constituency.
	Let us be honest, fair and truthful on European finance. The deal was the best that we could negotiate in the circumstances. We made the deal because we are the champions of enlargement. If we had failed to do so, the enlargement process would have halted and those countries that, in good faith, relied on our leadership would have been left with less money than was promised. I commend the Government on the deal and hope very much that we will continue to push forward the reform agenda so that we can address the points mentioned by the hon. Member for Buckingham and the agricultural policy, which is in need of absolute reformno Labour Member pretends otherwise. The deal was important at that stage. Let us now move forward with the economic agenda in the future.

Vincent Cable: It is slightly scary to discover that the hon. Member for Leicester, East (Keith Vaz) is monitoring our birthdays. I will be pleasantly surprised if I wake up in the morning and find that my family is as well informed as him.
	I slightly regret that the Minister for Europe is not in the Chamber, because I was planning to say something nice about him. It is probably going a little too farto say that he merits our congratulations on his appointment, but we certainly wish him well. As the hon. Member for Leicester, East quite properly said, the Minister for Europe has an important job, so it is important that it is held by a senior Minister and, moreover, someone with a long and commendable pedigree on European affairs. To that extent, I welcome the Minister to his role.
	Speaking as a former member of the diplomatic service, however, there is one thing about the Minister's appointment that has saddened me. The diplomatic service is one of the few Government departments that is not seriously dysfunctional, yet it has suffered the fate, a bit like Caesar's Gaul, of being divided into three parts. Development was taken out, and now the department has been split into Europe and non-Europe. A perfectly efficient department has been split, while the Home Office and the Department for Work and Pensions continue on their merry way. That is a strange way of managing government.
	I approach the European Union and its finances from a very different perspective from that of the hon. Member for Altrincham and Sale, West (Mr. Brady). I basically believe that the European Union is good for the UK, but I agree with his conclusions on the subject of our debate. The deal was very bad, and that came about because the Government utterly failed to secure their negotiating objectives. As I understood it, and as was clearly stated on many occasions, the objective was to make concessions on the budget rebate to secure fundamental reform of the way in which the European Union's funding was run, especially on agriculture. That was not achievedindeed, it was not even begun to be achieved. None the less, the objective was right.
	It was equally right for the Government to say that to support the process of enlargement, we needed to make concessions on the rebate. The enlargementhas so far been a success. It is now difficult to believe that 15 years ago, the enlargement countries were communist countries. Enlargement is a success story, with rapid growth and liberalisation in stable democracies. It has been successful in much the same way as the expansion of Europe to absorb the former fascist countries of southern Europe was successful. We need to reinforce that success, and we could have done so through the budget process. It would be utterly wrong to continue to defend an arrangement under which we were net recipients from eastern Europe. The Government were therefore right to set themselves the negotiating objective of trading off the rebate against fundamental reform.
	There were, however, two failures. Saying that the rebate was non-negotiable throughout most of last year was a presentational failure, as it was clearly negotiable and was, in fact, being negotiated. That position therefore did not make sense, and the Government made themselves look foolish. There was a substantive failure to achieve anything concrete or measurable in agricultural reform. The reason for that goes back three years to the agreement between France and Germany, which Britain apparently endorsed, to settle the European agricultural budget and agricultural policy until 2013.
	Historians will be taxed by the question of why the Government accepted that arrangement because, as the hon. Member for Buckingham (John Bercow) and colleagues with different points of view have argued, the common agricultural policy is utterly indefensible. It is economic nonsense, it is environmentally damaging, and it does enormous damage to world trade and to developing countries. However, in 2002 the British Government, for whatever reasonperhaps they took their eye off the ball because they were preoccupied with Iraqaccepted an arrangement that cemented the CAP in place.

Daniel Kawczynski: The hon. Gentleman stated that the Government failed to make the European Union see their perspective on EU financesbut why, despite the fact that Britain did so much to help Poland and the other eastern European states, did those countries not support our hopes of securing the rebate?

Vincent Cable: Some of them did. There was a mixed pattern of opinion in the EU, but eastern European countries wanted to secure the best deal possible. It is difficult to understand why, having failed to securea renegotiation of the CAP in 2002, the British Government sailed into negotiations in the belief that they could unpick the whole package. It was clear, however, that the French and the Germansthe French, in particular, were the villains of the piecewould not agree to it.
	This is not just an argument about recent history,as it has contemporary relevance. We understandfrom Mr. Mandelson and others that World Trade Organisation negotiations are in serious trouble because of the rigidity of the EU view on agriculture and its unreformability. The British Government's position is not only damaging but ridiculous, because they have absolutely no negotiating power whatever. Because they signed the agreement in December, and because they did not leave it open, they must accept the lowest possible negotiating position that other European countries adopt on trade policy.

Keith Vaz: I understand the point that the hon. Gentleman is making, but would he prefer not to have had a deal in December, leaving the EU without a budget? Would that be a credible position at the end of the presidency?

Vincent Cable: Yes, it would be absolutely credible. It would be embarrassing for the UK to complete the presidency without an agreement, but it was a perfectly tenable position. The EU would not have collapsed. It is important to get it right; instead, we got it wrong.

Mark Pritchard: I agree with the hon. Gentleman. He suggests that the Government are inconsistent, but is his own party not in danger of being inconsistent on this issue? I agree with all the points that he has made, but in their 2005 manifesto the Liberal Democrats wanted to give more powers away to Europe, particularly in relation to institutions that would mean that, if that party ever came to power, the UK would have less negotiating power.

Vincent Cable: The hon. Gentleman did not read the manifesto carefully enough. We support British membership of the European Union; we always have. We think that it is very good for Britain, but we believe that it needs radical reform. One of the key elements of radical reform is subsidiaritythe devolution of power to member states.

William Cash: I, too, am puzzled by what the hon. Gentleman is saying. It was only a short time agothat his party strongly supported the European constitutional treaty. That is not yet disposed of. Everything that we are discussing now is embedded in the existing treaties, which are rolled into the new constitutional treaty, which the Liberal Democrat party strongly supported. It is inconsistentto be blunt, absurdfor the hon. Gentleman to continue his argument on that basis.

Vincent Cable: The hon. Gentleman misrepresents the position that we took over the treaty. We accepted that there was value in a treaty unifying the various components of the European Union, but we fully accepted the principle of the maximum degree of subsidiarity, and we continue to do so.

Ian Davidson: Does the hon. Gentleman accept my view that the hon. Member for Stone (Mr. Cash) and some of his colleagues were being a trifle harsh in speaking to him in that way? Surely they should welcome the sinner that repents. Any indication from the Liberals that they are prepared to speak up for Britain against the grab by the EU is greatly to be welcomed. Will the hon. Member for Twickenham(Dr. Cable) give us a commitment that he and his party will vote against the budget, which he described as a bad deala very, very bad deal?

Vincent Cable: We certainly intend to vote against the motion this evening; I have no problem with that. There is no question of the sinner that repenteth. We are the only party that has consistently supported British membership of the European Union and consistently supported constructive negotiations to improve its workingunlike colleagues on both sides. Conservative Members were fervent supporters of the EU under an earlier Prime Minister, and then revolted against it. Labour Members were passionately anti-Europeanand have now, with a few exceptions, such as thehon. Member for Glasgow, South-West (Mr. Davidson), become largely sympathetic to it. We have been consistent throughout.

John Bercow: The concept of subsidiarity offers us no succour in relation to EU finance or own resources. Does the hon. Gentleman recall, in that context, that the relevant protocol first of the Amsterdam treaty and then of the Nice treaty clearly states:
	The application of the principles of subsidiarity and proportionality shall respect the general provisions and the objectives of the Treaty, particularly as regards the maintaining in full of the acquis communautaire and the institutional balance?
	That is game, set and match, is it not?

Vincent Cable: I do not recall that protocol, and the hon. Gentleman has an advantage over me on the detail. The central issue is that there was an opportunity to reform the Common Market agricultural policy and the Government missed it, but there are other elements in the budget package on which I wish to comment.

Wayne David: I thank the hon. Gentleman. It is kind of him to give way yet again. Before he moves on from his statement that he would have preferred no agreement to have been made by the British Government, rather than the agreement that was made, does he accept that that would have caused great problems for British farmers, and perhaps more importantly, huge problems for local authorities the length and breadth of Britain, particularly in my area? Is he prepared to tell those local authorities that the Liberal Democrats would rather have seen that money dry up completely than support being given?

Vincent Cable: I did not say that that was a desirable outcome. We are dealing with second best. If a postponement was necessary to achieve a better overall negotiation, that would surely have been rightbut we wanted to see a resolution. We want to see the European Union move forward, support for the east European countries and reform of the CAP. That is common ground. Members on both sides are enjoying scoring points, but there is a high degree of consensus on that matter.
	On the forward-looking items, I agree with the Minister that it is important to have tougher audit constraints in place, and that it is a disgrace that the European Commission has been able to get away with unaudited accounts for many years. Nobody would try to defend that. By way of mitigation, I point out that some UK Departments, such as the Department for Work and Pensions, have an audit trail that makesthe European Commission look positively efficient. Nevertheless, there is a legitimate criticism to bemade, and it is right that tighter procedures should be put in place.

Philip Davies: Given his consistent pro-European stance, does the hon. Gentleman think that it makes sense to give more and more money to the European Union for every year when the auditors fail to sign off the accounts?

Vincent Cable: I do not know what the hon. Gentleman means by more and more money. Spending has slightly exceeded the 1 per cent. formula, but not by very much, so we are discussing a consistent pattern of spending. Of course, there needs to be audit controlat the level of both national Governments and the Commission.
	The second item that will repay more attention than hon. Members have so far given it is one of the new innovations in the European budgetthe globalisation fund. At first sight it is an attractive idea, and it may prove to be a useful innovation, if it heads off some of the European countries that are moving in the direction of economic nationalism. If the measure persuades those countries to be less protectionist by providing funding for worker retraining, it is surely desirable, but we must be a little bit cautious.
	There have been attempts to set up trade adjustment funds in different countries over the past 30 years. I conducted some work on that point in the late 1970s and early 1980s, with particular regard to the United States, where a similar fund was set up in the mid-1970s. That fund ran into all kinds of problems, not least because some workers asked, Why should people be compensated because of trade competition, whereas other workers who have suffered from technological change or a collapse in markets should not be compensated? The political problems and problems of equity that arose were serious. There was some extremely unhelpful gaming behaviour, whereby industrial pressure groups secured trade protection in order to negotiate it off against money from the trade adjustment fund, and it is possible to envisage that kind of behaviour creeping into the European Union. The globalisation fund needs to be watched careful, although on balance it should be given an opportunity to prove itself.

John Bercow: How is the globalisation fund consistent with the general prohibition on the use of state aid? I know that that prohibition is honoured more often in the breach than in the observance, but it is nevertheless part of existing practice.

Vincent Cable: If the fund were part of state aid, I would agree with the hon. Gentleman. However, I understand that the new fund is specifically to help the labour force, rather than to help companies reinvest or otherwise protect themselves against competition. If that is the case, it is difficult to see how it could have the negative effects implied by the hon. Gentlemanbut it remains to be seen whether it works as a support for adjustment or against adjustment.
	There is one more element of spending about which some questions need to be asked. There is a lot of enthusiasm in the Commission, particularly from the President and othersagain, the enthusiasm has been generated for the best of reasonsto set up a European science university as part of the move towards support for integration in the world economy. I support that principle, but last week I participated in an Adjournment debate on science in British universities, and it is clear that British universities are at best sceptical about the concept, because although they have funding problems of their own, they are looking to collaborate across the world, in particular with the United States. They are also interested in securing a better funding formula in the UK, and see little advantage in having a specifically European project concerned with science. At some stage, we need to hear a fuller justification of how the new initiative will add value.
	We shall oppose the motion, because we feel thatthe fundamental negotiating objectives were not achievedalthough, as I have stressed throughout, we are and always have been a pro-European party. We want the European Union project to succeed, and the best way to make it succeed is to ensure that agriculture and the other defective features of the European Union are fundamentally reformed.

Kelvin Hopkins: I welcome an opportunity yet again to debate European Union finances. Before doing so, I want to comment on my right hon. Friend the Minister for Europe, who is not in his place at the moment, but whom I have already welcomed. I hope that he is going to prove to be more of a pragmatist than a zealot in these matters. We will probably never agree on European matters, at least publicly, but I hope that he will look at the European Union in a practical way and will not be blinded by the dream of a European federal state, which some people say that they are against although they are really in favour, while some of us are genuinely opposed to it.
	The budget remains a running sore in the EU. In December, we lost a serious opportunity to do something about it at a time when we had the leverage to stop a deal and get some fundamental change. It is nonsense to suggest that we are doing well on the common agricultural policy. I have been looking at the figures in the documents before us today. The table under Heading 2 shows the billions that are spent on agriculture, direct aid and market support. Over the next seven years, that is going to reduce by just under 1 per cent. a year. That means that we will extinguish the CAP over the next 100 years, or slightly more. I suspect that even then the European Court of Auditors will still be failing to sign off the accounts, but I probably will not be there to see it. We are still in the mire as regards the European budget.
	My hon. Friend the Member for Leicester, East (Keith Vaz) said that this is nothing to do with the constitution. I am afraid that that is wrong. In fact, what happened in December arose because of the splendid decision and success of the French people in defeating the proposal for a constitution. That did not please President Chirac, who, to deflect attention from his own apparent failure, lashed out at the British rebate in the European budget. I modestly suggested in a previous debate that if he wants to question our rebate, let us throw the CAP into the melting pot. If there is no CAP, there is no need for a rebate. Interestingly, the Prime Minister took precisely that case to Europe and debated it with colleagues. One would have hoped that we would say, You want to change our rebatefine, but only the basis of the abolition or very serious and fundamental reform of the CAP. That did not happen, we lost that opportunity, and now we are going to trundle on for 100 years, with perhaps a 1 per cent. cut a year. That is not acceptable, certainly not to the third world, which suffers terribly from the effects of heavy subsidies in the developed world, particularly in Europe.
	Agriculture policies should be repatriated in the first instance so that each country determines its own approach, because every country's agriculture is different. We can have international agreements about reducing subsidiesthat is finebut in the end it should be down to the decisions of democratically elected member states' Governments.

Daniel Kawczynski: Does the hon. Gentleman agree that to take forward the negotiations over CAP, it is vital that every country, including us, should have its own Secretary of State for agriculture? With the Department for Environment, Food and Rural Affairs as it is, the Secretary of State does not have enough time to focus solely on agricultural issues.

Kelvin Hopkins: That sounds like a sensible suggestion. I may say that my constituency is the only one in the eastern region of England that has no agriculture at allit is purely urban, with not a single field.

David Howarth: So is mine.

Kelvin Hopkins: I am surprised that there is another. Nevertheless, I take an interest in agricultural policy because it affects us all. I believe that every country should decide its own agriculture policy in a democratic way.

John Bercow: I welcome the hon. Gentleman's lamentation on the iniquities of the CAP. Will he take this opportunity to underline the crucial point that this is not a question simply of an accidentally damaging by-product of EU agriculture policy, but of the knowing, deliberate and calculated policy of the European Union to subsidise in a way that damages even more the most destitute people on the planet? That is the reality.

Kelvin Hopkins: The hon. Gentleman is rightthat is the only conclusion that one can draw. It is utterly cynical to continue to subsidise agriculture, especially exports. Until recently, one could buy European-produced sugar in Malawi at a lower price than that at which the Malawians could produce it simply because it is dumped.

Angus Robertson: Given that the hon. Gentleman is considering agriculture, will hetake the opportunity briefly to mention fisheries? The fleets of Norway or the Faroe islands manage tofish the same waters and sustain fisheries but UK policy, supported by the Labour party and the Liberal Democrats, of remaining in the common fisheries policy will mean a disaster for our coastal communities.

Kelvin Hopkins: The hon. Gentleman was just ahead of me. I was coming to that point but perhaps he makes it more eloquently than me. I fear that there is nosea fishing in Luton, but I have a view about the common fisheries policy and the hon. Gentleman is right. I am a member of the Norway group and I recently visited that country. I asked whether the Norwegians genuinely wanted to include their fishing waters in the EU CFP because they would have few fish left after a few years. We must restore fisheries to member states and get rid of the nonsensical CFP. Having landlocked countries voting on the CFP is to our disadvantage because we have the largest coast line.

Ian Davidson: Does my hon. Friend agree thatthe road towards repatriating fishing and, indeed, agriculture, is taken by rejecting the budget so that we can place road blocks in the way of further accretion of power to the centre as a prelude to rolling powers back to individual countries?

Kelvin Hopkins: As always, I agree with my hon. Friend. I want the EU as it should bea voluntary association of independent democratic member states, co-operating for mutual benefit and that of the world.

William Cash: The hon. Member for Leicester, East (Keith Vaz) mentioned my birthday earlier. I was born on the day when Winston Churchill took over as Prime Minister and rejected the appeasement that had characterised the conduct of British foreign policy for a long time. He said, in line with the words of the hon. Member for Luton, North (Kelvin Hopkins), that we should be associated but not absorbed.

Kelvin Hopkins: Indeed. I would have thought that other member states felt that. In fact, they are becoming more aware of it. As enthusiasm for the EU declines, people want to assert their independent democratic rights without being nationalistic. The problem with the current arrangement is that it is likely to increase the unpleasant sort of nationalism because people feel that their democracy is somehow being weakened. To decide as free member states, confident in their democracy, to work voluntarily with other member states, is a recipe for genuine co-operation and internationalism. That would remove or at least reduce the amount of unpleasant nationalism that exists in member states, including Britain to some extent. There are dangers in such nationalism, as we know from European history.
	Let us consider what happened in December. Britain was guilt-tripped into doing a deal because, without it, the poorer, newer member states would be disadvantaged. They are disadvantaged because the budget is overwhelmingly dominated by agriculture spending in richer member states. We should simply have a budget arrangement without the CAP and the CFP.
	Aid policy, too, should be repatriated because it is inefficiently managed in Europe and goes to the wrong places. We do well on aid and have a good reputation and we could even operate on an agency basis forthe EU through the Department for International Development. That would be much better than operating through the EU. Nevertheless, we could have an agreement to spend a proportion of our gross domestic product on aid but to administer it ourselves or on an agency basis, without going through the European Commission, which is notoriously inefficient in administering it.
	We were guilt-tripped into the decision about the newer member states. However, if all the other aspects of the budget were reduced or eliminated, we could have a budget that could be administered in an absolutely fair way. Contributions and receipts could be exactly proportional to the levels of prosperity in the different member states. The rich states could pay in according to their prosperity, and the poorer ones would derive benefit from the budget according to their relative poverty. That would be a fair and moral way of implementing a redistributive budget. The fiscal transfers would be precisely fair. I might even suggest that it would be a socialist approach, involving redistribution from the rich to the poor. I would be very happy indeed with such an arrangement.

Daniel Kawczynski: The hon. Gentleman talks about the state aid that we have given through the budget to poorer eastern European countries such as Poland. Does he agree, however, that the British private sector has also invested a great deal in those countriesover the past decade? I only have to travel through downtown Warsaw to see that many of the new business set-ups have been funded by British capital investment.

Kelvin Hopkins: I am sure that that is true, but the hon. Gentleman has the advantage of me in that area, in which I do not specialise, and I do not have any figures to hand on investment in eastern Europe.
	The way in which the budget operates is said to be beneficial to Britain because we have a trading advantage, but in fact we do not have such an advantage with the European Union at the moment. The great majority of our exports go outside the European Union. We are very different from Germany in that regard, in that the proportion of trade that goes to the European Union from Germany is about seven times greater than the proportion that goes to the EU from Britain. Germany has a massive export surplus with the rest of the European Union; it is very much greater than the relatively small amount that we export to the EU. We import a lot from the EU, but we do not export a great deal to it.

John Bercow: Statistically, the hon. Gentleman is absolutely right to say that the preponderance of our exports goes outside the European Union. In reflecting on the EU budget, would he agree that it is unsatisfactory that, in presenting their arguments about trade, Ministers consistently get it wrongthey must know that they are doing sothrough the ancient and discredited practice of double counting that which goes through Rotterdam? It really is not good enough.

Kelvin Hopkins: I thank the hon. Gentleman for his helpful intervention. Governments of both colours talk about exports rather than about the balance of trade. The concept of exports net of imports is very different from that of exports alone. Exports increasing by 1 or2 per cent. a year might sound splendid, but if imports are increasing by 5 per cent. a year at the same time, it would create a big deficit, which would not be particularly advantageous. We should look at trade balances, rather than simply at exports.
	That also says something about the level of a country's currency, relative to other currencies. One of the reasons why I believe that we should retain our own currency is that it enables us to have a sensible macro-economic policy and to adjust our currency to an appropriate level. That is necessary for trade.
	As I was saying, we were guilt-tripped into the decision to go for this budget. It was suggested that, without agreement on it, we would somehow deprive the less fortunate newer member states of the European Union, but in fact the people who went laughing all the way to the bank afterwards were the rich countries that benefit most from the common agricultural policy. The full CAP benefits do not accrue to the newer member states, because they are being tapered in over several years. So the CAP budget is still going to the richer member states that have larger agricultural sectors, such as Denmark, Ireland and France. Those countries arguably have higher living standards than ours; they are certainly very prosperous. And good luck to themI am very pleased that they are, but we should not subsidise them to the disbenefit of the poorer member states of the European Union.
	My final point about net contributions has perhaps already been made. Our net contributions have multiplied substantially in the deal and, according to calculations from Global Britain, we will contribute net more than 10 billion a year for the next seven years. If that money was simply going to the poorer nations of Europe, there might be an arguable case for providing it. However, it is not, and 10 billion is a significant sum. It is roughly 12 times the deficit in the NHS this year and 10 times more than we would have to pay for free long-term care, in which I passionately believe. Such a sum would enable every pensioner in Britain to have a 20 a week increase in the basic state pension. Although 10 billion as a proportion of GDP may not be that much, it is a lot of money if one considers it in terms of what it could provide.
	If we reduced our net contribution to a level that was appropriate to help the poorer member states of Europe on a moral and socialist basis, that would be fine. However, our net contribution is too big and there are other things in our country that we should spend the money on, such as redistribution to the poor. We still have significant poverty in Britain, particularly among the elderly, and I would like to see an increase in the basic state pension that could be paid for by cutting our contribution. There are better things that we could do with our money.
	In short, we still have to campaign for the abandonment of the CAP and the common fisheries policy and for structural fund spending to be used to redistribute income to the poorer member states, and we should let them decide what to spend the money on rather than having that determined in Brussels. The aid budget should be repatriated and, in future, we should focus on redistributing simply according to the relative degrees of poverty and prosperity in the European Union. That is the way forward for a friendly, co-operative and truly internationalist Europe.

William Cash: It is always a pleasure to follow the hon. Member for Luton, North (Kelvin Hopkins).
	I am sorry that the Minister for Europe is no longer present, and has not been present for some time. When he opened the debate, we recalled that we were the main protagonists in the debates on the Maastricht treaty back in the early 1990s. He was a new Member of Parliament and the late John Smith gave him the job for the Labour party of dealing with the nuts and bolts of the treaty. I tabled about 150 amendments and, because in those days we did not have extravagant parliamentary devices, at least on the scale that we have now, we were able to force debates, and we did so resolutely. I pick out my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) as a veteran of those days, and many would say that we set out a series of arguments that have proved to be correct.
	By all accounts, the Chancellor of the Exchequer was not consulted when the deal went through in December. I said that he had been passed a poisoned chalice, because the money has to be found from somewhere and I have already given the details of the considerable increase that has occurred since December. The European commissioner has made that increase public and, as the European Scrutiny Committee report demonstrates, it far exceeds the amount that the Prime Minister said that the United Kingdom and other member states would contribute. The sum is so significant that one might say that it smacked of massive incompetence and that he did not want the Chancellor of the Exchequer to know the full details.
	Let us consider the appointment of the hon. Member for Normanton (Ed Balls)he was here at the beginning of the debate, and I am missing him nowto the position of Economic Secretary. He is an alleged Eurosceptic who has continuously put arguments in various publications and given indications to suggest that he is dissatisfied with the way in which the European Union is functioning, but he has been given a job of great responsibility. I say with respect to the Paymaster General that it is a great pity that the Economic Secretary is not replying to the debate. Just as in those days of the Maastricht treaty when I found myself in a considerable alliance with the late Peter Shore, who performed a noble service tothe House over many decades, I wondered whether the disagreements between the Prime Minister and the Chancellor of the Exchequer may not, on close inquiry, turn out to be based on a difference of opinionwith regard to the European Union and its financial management. After all, it is the five economic tests imposed by the Chancellor, which reputedly came from some of the ideas of the new Economic Secretary, that laid down the basis on which we were not, to all intents and purposes, to go into the euro.
	I think that a deeper question lies at the heart of the debate: which way are the Government going to go in respect of the future financial management of the EU as seen through the eyes of the British Treasury? It has been badly burned and cannot afford to pay for the public services or to perform the functions that the EU has been given without massive taxation. There is, therefore, a deeper problem.
	It is a failed systeman undemocratic and unaccountable systemthat we are debating. It is a system that has been rejected by some of the other countries. The financial management and economic management implicit in the Maastricht treaty is the basis on which the European constitution was defeated. Contrary to what was stated at the time, it was not simply because President Chirac had become unpopular; it was actually because the policies that were being pursued in respect of European Union treaties had made President Chirac so unpopular. That is why there were riots in the streets and why the French people turned on their own Government. They did so because of a sense of disillusionment. They were told that they were going to get a good deal and then discovered that they were getting an extremely bad one because of the massive unemployment that followed in the wake of the pursuit of European economic management and European directives, in particular with respect to the contract, which had to be abandoned. The Government wanted to make economic reforms and they could not. Angela Merkel is attempting to make economic reforms in Germany, but she cannot. The bottom line is that the whole of the EU is not merely creaking, but collapsing and imploding. The consequences are severe.
	The beneficiary of those policies is the far right. The Eurobarometer poll shows that the EU is even more unpopular in Austria than it is in the UK. There is a reason for that.

Angus Robertson: The hon. Gentleman is right to point out the dangers of the political far right throughout the European Union. Does not it therefore concern him that his party is prepared to leave the European People's party and join the lunatic, right-wing, fringe elements to be found in the European Parliament?

William Cash: First, the hon. Gentleman, who is a colleague of mine on the European Scrutiny Committee, knows perfectly well that that is not the case. We are not going in with any fringe, semi-fascist type of party; I dismiss that completely. There are serious discussions about the fact that what I, my hon. Friend the Member for Aldridge-Brownhills and others said abut the Maastricht treaty has proved to be the case. We have been right on Nice, Amsterdam and the European constitution. In point of fact, there has been a rejection of integration, financial management and fraud and a repudiation of the system that has been put in place. That must be complemented by sensible, practical policies from the centre right, which is basically where we stand. My party must be more explicit in setting out the case and must look carefully at the local government results, which show the British National party, for example, picking up the sentiment that can be created by leaving a vacuum in the centre right. It is essential that we

Madam Deputy Speaker: Order. Could we return to discussing EU finances in more detail?

William Cash: I am grateful to you, Madam Deputy Speaker, but I see a strong connection between the operation of EU finances and the development of such undesirable political parties.

Wayne David: Will the hon. Gentleman indicate why his party is not making the explicit case that he would like?

William Cash: We need to be blunt and clear with the British electorate about such matters In particular, we must adopt a policy, as I have said on a number of occasionstoo often to repeatof an association of nation states. We must get away from the failed policy of European integration. It is not enough to say in the House or elsewhere that we do not like what we see. The only way to deal with the treaties, which some allege wrongly are set in concrete, is to take the appropriate steps to repatriate powers, by unilateral decision of this House, where negotiations fail and it is in our national interest, and to ensure that the judiciary abide by the legislation that we pass, which would be inconsistent with the European Union's. That also applies to the provisions under discussion.

Peter Bone: rose

Madam Deputy Speaker: Order. Before any further interventions are made, I remind hon. Members once again that, interesting though the wider debate might be, we are now discussing EU finances.

Peter Bone: Does my hon. Friend agree that the100 billion plus in today's money that this Government have given to the European Union is one of the reasons we are seeing the rise of the extreme right?

William Cash: I am bound to agree. It is a tragedy, because we need a balance. Co-operation is one thing, but appeasement is another.
	I was disturbed to discover that the motion, despite being merely a take note motion,
	supports the Government's objective of securing agreement...in line with the agreement reached by Heads of Government at the December European Council.
	I do not know who drafted that, but whoever it was must knowdefinitely knowsthat the European Scrutiny Committee insisted as far as we could, in this case successfully, that today's debate should take place on the Floor of the House, not least because the December deal was not, and is not, the deal that we are now debating.
	I made that point in an intervention on the Minister, who has still not returned to the Chamber. I do not know why. I suppose that he must be embarrassed by the fact that he cannot answer the questions that weare asking. In that intervention I said thatMrs. Grybauskaite, the European Commissioner who I am told is a Lithuanian with a black belt in karateI do not know whether the Paymaster General is up to a black belt in karatewas more than keen to get the matter out into the open. According to her, the final spending for 2007-13 will exceed 600 billion, which is 24 billion above the budget that the Prime Minister announced in December. That means that the taxpayer will have to find an extra 2 billion, and that Britain will now contribute 44 billion to European coffers over the next budget period. In other words, as I said in my intervention, not only does the new total make a mockery of the Prime Minister's claim to have held the budget to 862 billion at the December summit; it makes nonsense of the motion that we are debating. That is the key point.
	No wonder even the Liberal Democrats have been brought shouting and screaming to oppose a piece of European legislation. This is the first time, during my 22 years in the House, that I have heard words uttered by a Liberal Democrat that indicate any opposition to the maniacal system in which we are now involved. I will certainly give way if the expression on the face of the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) means that he would like me to.
	The hon. Gentleman has nothing to say, because there is nothing to say. I am very glad that the Liberal Democrats are picking up the message, in view of the abysmal results that they achieved in the recentlocal government elections. Those of us who have consistently and persistentlyI make no apology for itmaintained an argument that is now being proved correct note that they are having to shift their ground on the issue.
	It is also true, as one or two Members have pointed out, that on 8 June last year, when asked during Prime Minister's Question Time whether the rebate was negotiable, the Prime Minister said
	The UK rebate will remain and we will not negotiate it away. Period.[ Official Report, 8 June 2005; Vol. 434, c. 1234.]
	We all know that that was rubbish. I suspect that the Prime Minister knew that it was rubbish at the time, but he was in a very tricky political environment, and the Prime Minister always becomes trickier the trickier the situation becomes.

Kelvin Hopkins: If the Prime Minister had said unless and until the common agricultural policy is abolished, that would have worked.

William Cash: Indeed. It would also have worked if he had said If we want to achieve economic competitiveness we will have to renegotiate the legislation, or else legislate unilaterally, on our own terms, here at Westminster. He is not going to do that either, although, as I shall explain shortly, this financial settlement includes a vast amount of money that is being poured down the throat of the European Union for the purposeallegedlyof increasing competitiveness. As the hon. Member for Leicester, East (Keith Vaz) knows extremely well, the Kok report criticised the Lisbon agenda because it does not work. The vast amountbillions of poundsbeing spent on that agenda is being completely wasted. It is being frittered away, and it is our taxpayers' money.

Keith Vaz: The Kok report did not say that. It said that the benchmarks set in Lisbon had not been met, and it set out a path to ensuring that the EU countries met them. It did not say that the Lisbon agenda was a waste of public money.

William Cash: The hon. Gentleman gave evidence to the European Reform Forum that we set up, and he has the advantage of being able to read the evidence that Will Hutton, the rapporteur to the Kok report, gave to the forum, which is on the transcript and in the public domain. It would be well worth the hon. Gentleman and others reading what Will Hutton had to say about the Lisbon agenda. Despite further such attempts being made since then to deal with this issue, there has been no improvement.
	There is another issue about which I am deeply worried. The European Scrutiny Committee was obliged to say the following in its report:
	It is regrettable that it was not possible to have the debate we recommended on this issue before matters had progressed so far on the new Inter-Institutional Agreement. Nevertheless, we still think a debate on the Floor of the House worthwhile.
	At the heart of that comment lies the fact that this House is being treated with contempt. We are being invited to debate a matter that, to all intents and purposes, has already been sewn up. I regret to say that it has been sewn up with a degree of misrepresentation, in that the figures have been increased and we were not given the chance to debate the issue in sufficient time.
	The own resources decision will have to be debated in the context of a forthcoming European finance Bill. I have asked Ministers when we will have that Bill on a number of occasions, including via a written question. Labour Membersindeed, all straightforward, honest Members of this Househave a decision to make: whether, in the light of the manner in which the House has been treated, they are prepared to vote against their own Government on that Bill. The opportunity to do so will certainly arise, and I strongly urge them to do so.
	Our report also pointed out that this debate could examine the increase in the financial perspective ceilings. As my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) said, the former Minister for Europe stated in his explanatory memorandum as recently as 21 February that the Government would strongly oppose any proposal to increase the overall expenditure ceiling agreed by the European Council. However, the honest truth is that the Government simply rolled over, and at considerable expense to our own taxpayers.
	Our report also suggested that the debate should look at the reasons for any reallocation of spending between different expenditure headings. The then Minister for Europe said in February that the Government,given the delicate nature of the European Council compromiseI love the way that they put it, but in fact the compromise involved rolling over in the face of President Chirac and pathetic grovelling to other member statesapparently did not see any scope for re-allocation. It is quite disgusting to read how they tried to weasel their way out of explaining what is, in reality, a complete and total failure to subscribe to the principles set out by the Prime Minister during Prime Minister's Question Time on 5 June last year.
	The report continues:
	The Minister asserts that the European Council agreement represents a good deal for the EU and a good deal for the UK.
	Well, it will cost a good deal of British taxpayers' money, but it is not a good deal for them.
	It is pathetic to have to say so, but the report continues:
	He notes that the proposed total EU expenditure over the period would be 862 billion.
	We know that that figure has gone for six. The report continues:
	As a share of EU GNI, this would mean that the total expenditure ceiling would fall from 1.1 per cent. of EU Gross National Income in 2007 to 1 per cent. in 2013, the lowest level
	it is claimed
	in 20 years. Nevertheless it is an increase in real terms of 13 per cent. compared with the current period.
	That is the point. It also states that there will be
	significant increases in EU spending on priority areas, including...a real annual average increase in spending on research and development of 7.5 per cent...a sevenfold increase in regional spending
	that is very important and serious
	from 24 billion...to 174 billion in the next...period.
	That is where the money is going. When we talk about regional spending in relation to the UK and elsewhere, we know what it means. The report also mentions
	the real annual average growth in spending on freedom, security and justice of 15 per cent...and...an increase of 4.5 per cent...in spending on external actions.
	The plain fact is that this is a travesty and a disgrace. This is not a take note motion and there is more than enough reason for the Opposition and Labour Members to vote together to reject this ridiculous financial management.

Wayne David: I, too, welcome my right hon. Friend the new Minister for Europe. He has a great knowledge of the European Union and it was my privilege to serve with him in the European Parliament for five years, where he was a distinguished chair of the European Parliament United States delegation. I mention that because he is one of those Labour Members who realises that just because one is pro-European does not mean that one is anti-US. He recognises that one can be both, and the way forward is to match the two together, which I am sure he will do skilfully.
	My right hon. Friend is also one of those people who are against the whole concept of the European super state or federal state. He believes that Britain's role is in Europe but as a freestanding, independent, sovereign nation state. He believes that the European Union is about that kind of association, as does the Labour party as a whole.
	I wish to focus on one or two areas that have not been mentioned much so far. Much emphasis has been placed on the issue of fraud in the European Union and I am sure that we would be unanimous in condemning fraud in all shapes and forms. However, we should be clear that it has been consistently the case that most of the fraud in the EU has been the responsibility of independent, sovereign member states. It has been their fault for not putting their houses in order in relation to EU finance.

Peter Bone: Will the hon. Gentleman name the countries that are guilty of that fraud and does he include the UK?

Wayne David: No, I certainly do not include the UK. The southern Mediterranean countries, by their own admission, have not got financial systems in place that are sufficiently vigorous.
	My main point is that we have seen monumental change in the past few years in the shape of the EU, and there has been no greater change than the addition of 10 new member states, nine of them in central and eastern Europe. We should welcome that and be proud of the fact that our Government, more than any other, championed the enlargement process, which has been entirely successful.
	Enlargement is significant in a political sense, too. Most of the countries that have entered the EU tend to share the British perspective on EU development. They, too, do not want a centralised European superstate, run from Brussels. Having thrown off the yoke of the Soviet Union, they cherish their sense of identity and purpose and, like us, they will not easily give it up again.

Ian Davidson: Notwithstanding the views of the new accession states about centralisation, does my hon. Friend accept that ever since those countries joined, there has been a constant pattern of more and more power being accreted to the centre? There has been no balancing delegation of powers from the centre to individual nation states, so irrespective of the views of the new accession states, they have actually gone along with the centralisation process. Their presence has made no difference whatever.

Wayne David: With all respect to my hon. Friend, that is not the case. In some areas, there has been an increased pooling of sovereignty by common consent, which is a positive development. However, over the last few months, not least due to pressure from the British Government, the European Commission has withdrawn a number of draft directives and said that they will not be enforced. In certain key sectors, such as immigration, justice and home affairs, where greater co-ordination is needed, it has taken place, but elsewhere there has been a reduction in the amount of EU red tape and bureaucracy.

Mark Pritchard: Come on.

Wayne David: The facts speak for themselves.
	In the context of this debate, my main point is that democracy is fragile and frail in the new countries that are joining the EU, so it must be properly supported by mature democracies such as ours. As a socialist who believes in the redistribution of wealth, I think that Labour Members should be proud of the fact that we are prepared to help countries entering the new European family by giving material support in terms of the budget agreement. We should not be ashamed of that.

Mark Pritchard: On material support, and regional grants in particular, does the hon. Gentleman share my concern that, unfortunately, many of those grants tend to disappear and that there is too much corruption in some quarters, which has a bearing on how British taxpayers' money might be spent in those new EU countries?

Wayne David: I share that concern to some extent, but the important thing is that support from the EU through regional funding is of enormous assistance not only in helping to develop democracies but also in ensuring that they have fully functioning market economies. Such changes do not just happen, so it is laudable that the UK has led the way in the EU negotiations and has said that to make the market work as effectively in central and eastern Europe, as it does, largely, in western Europe, we should be prepared to ensure that there is assistance so that there can be full transition from Soviet-style command economies.

Danny Alexander: By and large, I agree with the sentiments that the hon. Gentleman is expressing about our duty to support the countries of eastern Europe that have entered the EU. But does he agree that the provision of European regional funding is also of great importance to some of the poorer parts of the UK and does he share the disappointment of people in the highlands and islands because the amount of funding that our area is receiving, as a transition area, is falling dramatically? Would not it have been better for the Government to have negotiated as strongly in favour of the highlands and islands as of the eastern European countries that he described?

Wayne David: The hon. Gentleman pre-empts me, as that would have been the next point in my speech. However, he should realise that earlier the Liberal Democrat spokesman spoke against any kind of agreement because he did not think that the Government's position was fair. The Liberal Democrats should sort out their own line, before they make interventions in the House.

Angus Robertson: May I add to the hon. Gentleman's background on this subject? Does he not think it odd that, in Scotland, where the Liberal Democrats are in government, they take no responsibility for the failure of Government, but they come down here and blame the Labour party, although they are in bed together in government in relation to that important loss of funding to the highlands and islands?

Wayne David: I am certain that the hon. Gentleman has made a very good point indeed, and I certainly bow to his knowledge on the matter, given his involvement in Scottish politics.
	My final point on support for central and eastern Europe is that we have a moral responsibility to ensure that those democracies grow and flourish, but it is not only in the interests of those countries that have recently joined the EU that they are fully functioning market economies, it is in our interests as well. One of the things that I hope that we will see over the next few years is British business taking effective cognisance of the fact that we have developed new market economies in central and eastern Europe and exporting to and engaging with those economies in a way that has so far not happened.

Philip Davies: Does the hon. Gentleman not accept that this country's future prosperity depends on developing markets in Africa and with the Commonwealth and China, that the EU is 20 or 30 years out of date in terms of prosperity and that what we are being asked to do is wrong? We are being asked to fund an ever-increasing amount of money for a backward-looking, inward-looking protection racket.

Wayne David: With all due respect, the hon. Gentleman is very good at soundbites, but the important thing to recognise is that, by our active engagement inside the EU, we are not putting all our eggs in one basket. Yes, we can be effective Europeans and help to develop that economy to our own advantage, but that does not stop us trading with the rest of the world. It is not an either/or situation. Let us do both. Let us recognise that we are an international nation. What concerns me about Opposition Members is that, all too often, what they are saying, when we scrape away all the economic veneer is basically a very crude form of xenophobia. [Hon. Members: Oh, come on.] Yes, it is. When weget down to basics, what they are really saying isthat they do not like Europeans. The economic arguments objectively speaking are for Britain's positive engagement in the EU, and for an EU that embraces the free market and makes ever-deeper the single European market. We should be arguing for its completion, not for some kind of semi-detachment or even withdrawal, as some hon. Members would like. That is the real agenda that we must get to grips with in the future.
	The second point that I should like to make in my brief contribution is that I believe that the Government negotiated a good deal for Britain back in December last year. Undoubtedly, some hon. Members who represent certain regions are not particularly happy with the budgetary settlement as negotiated, but let me say quite honestly, as a representative of Caerphilly in south Wales, that we were absolutely delighted that the Government negotiated an effective continuation of objective 1 status for cohesion funding, so that some 1.2 billion will come into our region over the next financial perspective. The first tranche of that money has been put to very good use in tackling economic inactivity and developing economic infrastructure, training and so on, and there is no doubt in my mind that the good situation in south Wales, where more people are in work than ever before in history, will continue and we will be pleasedindeed, we will be singing in the valleyswhen the new strand of funding comes through.

Mark Pritchard: I am slightly perplexed by the hon. Gentleman's comment on objective 1 being given to his constituency. Part of the criteria for objective 1 is high unemployment, yet the part-time Secretary of State for Wales tells us from the Dispatch Box that unemployment is decreasing in his area. Is unemployment going up or down?

Wayne David: Unemployment is going down; gross domestic product is going up, but the important thing to recognise is that, in the Government's extremely skilful negotiations, they were able to ensure that the figures used by the European Commission were a little out of date [ Interruption. ] That is true. They do not show effectively the tremendous improvement in the south Wales economy. I am pleased to say that we are having our cake and eating it. Our Government can be criticised for many things, but they cannot be criticised for not being adept at negotiations. That is a practical, material, down-to-earth example that highlights clearly how effective the Government have been in ensuring the continuing development of areas such as the south Wales valleys.

Peter Bone: Will the hon. Gentleman reconsider his answer to my earlier intervention? He said that the UK Government have not been involved in matters relating to fraud; it sounds like what he has just been talking about is fraud.

Wayne David: I do not think that that intervention is worth answering and I can see Members all around me nodding to that effect. As far as the structural funds are concerned, the Government have acted strongly not just in the British interests or the interests of Europe as a whole, but in the interests of areas that have experienced tremendous trauma with the decline of the steel industry and the coal industry.

Bob Spink: May I provide an intervention to which the hon. Gentleman might be able to respond? Does he accept that, good as things are in Caerphilly, they could be even better? Every member of the European Free Trade Area has a higher level of GDP than the low average of the EU members, and exports more to European countries than we do. If we were outside the EU, we could be sustaining even more economic growth, even more per capita GDP and even more per capita exports and therefore jobs in Caerphilly.

Wayne David: I hear the true voice of Conservatism being expressed with the utmost clarity: let us get out of the European Union and recreate the European Free Trade Association as it was. If that is not turning the clock back, what on earth is? Let us be honest and frank. I am glad that the hon. Gentleman has been that frank. I hope that the hon. Member for Altrincham and Sale, West (Mr. Brady), who is smiling, will take up his lead and articulate that point as clearly and precisely. That goes back to my earlier point. The debate is about whether we turn the clock back and somehow pretend that we can disengage, have associate member status or withdrawMembers can call it what they like. It is about whether we can somehow separate ourselves from mainland Europe and develop mythical new relations with the rest of Europe. That is not the real world and we all know it in our heart of hearts.

Ian Davidson: Will my hon. Friend give way?

Wayne David: No, I will not.
	The real agenda is how on earth we make this effective single market even more effective. How can we expand the European Union and deepen the economic integration that is to our advantage and in the interests of the people I represent. The hon. Member for Castle Point (Bob Spink) mentioned my constituency of Caerphilly. I speak regularly to industrialists and, unanimously, they say to me, For goodness sake, let's not go down this crazy road of separating ourselves from the European Union. Both the employers and the employees recognise fully that this country exports more to the European Union than to any other part of the world. To cut ourselves off from that and see the imposition, once again, of all the impediments to trade that used to exist, would be catastrophic to the economy of this country.

Robert Goodwill: rose

Wayne David: I have given way many times already.
	In conclusion, I believe that this country negotiated a good deal all around. Of course, if one looks at the Government's opening negotiating position, they did not achieve everything that they set outone never does in negotiations. The European Union is all about achieving a progressive consensus. When we look back at the British presidency of the European Union, I am proud that we can say that it was a great success. Two of the great things that stand out are: first, the fact that we have ensured a start date for negotiations with Turkey and that negotiations are continuing for Turkey eventually to join the European Union, and, secondly, that we have had a budget deal that is good for the people of this country and of the continent as a whole. We should be proud of that. It is something that we should be celebrating, and certainly not denigrating.

Angus Robertson: I am not keen to enter into the very public grief of the Government at the time of the reshuffle, but want to put on the record some sadness that the Minister for Europe is no longer the Leader of the House, albeit not because I do not think that he has many talents that he will offer in his new post. Those of us who are members of the European Scrutiny Committee will remember a discussion that we had with the right hon. Gentleman several months ago in which he had innovative ideas about improving the scrutiny of European business in the House. I hope very much that his successor as Leader of the House will take those suggestions forward. I have no doubt that the Minister for Europe will bring his great experience to European matters, not least as a former Member of the European Parliament, and we in the Scottish National party and Plaid Cymru wish him well.
	Speaking as someone who represents a constituency that has benefited greatly from EU funding, I wish to make a point about EU finances that has been sadly lacking from much of tonight's debate. In Moray and the other areas of the highlands and islands, there is tremendous appreciation for the support of the European Union over the past decades. Many of us well remember the cash-starved situation in our communities in the dark 18 years in which the Conservatives were in government. It is ironic to think that throughout that time, Brussels was seen as much more benign whenit came to governance than wasperhaps still isWestminster. It is with great regret that the highlands and islands has lost objective 1 funding.
	We have heard much about fraud, mismanagement and the inappropriate use of statistics, but the loss of objective 1 support for the highlands and islands was home-grown. It did not happen because of Brussels, or other dastardly EU member states. Scotland's national wealth was overstated by 21 billion throughout the 1990s owing to a catalogue of flawed assumptions that were used to compile the UK's accounts. Newspaper coverage in  The Scotsman at the time said that the UK
	Office of National Statistics has admitted to an Enron-scale error, which has been artificially inflating Scotland's national income by as much as 3.3 billion a year since at least 1989.
	That blunder deprived the highlands and islands of 200 million of EU grants. I hope that hon. Members who have driven through the highlands and islands and are aware how many infrastructure projects were completed only because of the support of the European Union will appreciate that the blunder with which we now have to live, as the recipients of only transitional funding, not objective 1 funding, was severe.
	It is important that we all accept that the loss of EU funding is not of itself a bad thing. As economies throughout the European Union grow and countries become wealthier, surely those of us in the wealthier parts of Europe have to bear part of the burden so that we can ensure that other parts of the EU catch upwith us. The argument that I will deploy is thus not motivated by a lack of appreciation for our paying our fair share. We should do that, but it is key that we consider the transitional arrangements betweenthe outgoing funding period and the funding period agreed recently.
	Under the budget deal agreed at the December Council under the UK presidency, the global overall total for European social fund spending was reduced substantially, which will have an impact on communities the length and breadth of the land. Some 308 billion has been allocated for EU funding. The Department of Trade and Industry estimates that the UK will receive9.4 billion, of which 2.6 billion will be allocated to convergence funding for Cornwall, west Wales and the valleys, and the highlands and islands. Approximately 6.2 billion will be allocated to competitiveness funding for other regions.
	In December 2004, the Scottish Executivethe devolved Government comprising the Labour party and the Liberal Democratsestimated that the highlands and islands would get 460 million and the rest of Scotland721 million. That is a significant amount, and it is important for planning the growth of our economy in the years ahead. Only two short years later, in January 2006, the Executive said that Scotland could receive up to 45 per cent. of the sum we will receive in the current programming period. The highlands and islands would receive 105 million as a so-called statistical effect region under convergence, which is only 60 per cent. of the amount that they currently receive. Basically, the Scottish Executive's estimates have been chopped by two thirds, and the remaining sum is considerably less than they were expecting. Some hon. Members have asked what is being done, but I want to know what the Scottish Executive were doing. What did the Enterprise Minister, Nicol Stephena Liberal Democratdo when he realised that the Scottish economy will lose hundreds of millions of pounds of funding? Why did the Liberal Democrat Transport Minister not bemoan publicly the loss of significant funds to improve road transport, not least throughout the highlands and islands?

Robert Goodwill: Does the hon. Gentleman not agree that it is bizarre that our Ministers go to Brussels and accept the importance of structural funding in peripheral regions such as Spain and Poland but do not recognise its effect in areas such as Scotland and Wales?

Angus Robertson: That is not the only problem. Devolved Ministers have the right to attend Council of Ministers meetings, and it would be interesting to compare and contrast their attendance records, which can be downloaded from the Council of Ministers website, for those important discussions on key resources, so that we can see how Liberal Democrat Ministers in the Scottish Executive defended the national interest.

Mark Pritchard: Does the hon. Gentleman not agree that while the Scottish Executive have played a part in the problem, Scottish local authorities failed to spend money from the last round, so their budgets were cut? In effect, they were penalised for not coming up with the goods and delivering projects on the ground.

Angus Robertson: I very much hope that local authorities, devolved Administrations and Governments everywhere make the most of EU funding. I do not believe in moaning about EU funding, because I have seen the positive benefits that it can bring. I encourage Administrations of all political colours to make the most of it. I cannot stand political cant. We hear that things should be done, but people with political responsibility who could do something about them do not even turn up to important meetings to discussthem.  [ Interruption. ] The hon. Members for Alyn and Deeside (Mark Tami) and for Glasgow, North-West (John Robertson) say that I should name them. I shall be happy to forward the attendance list for Council of Ministers meetings, so that they can compare and contrast the attendance record of Liberal Democrat Ministers at key EU meetings.
	Time is running out, and at least one other Back-Bench Member is keen to speak. The Department of Trade and Industry is consulting on the UK national strategic reference framework, which sets out general principles for governing ESF spending in the UK as a whole. The Scottish Executive, including the Liberal Democrats, have drafted a Scottish chapter, but it does not specify priorities in future Scottish programmes and does not indicate the resources required for each priority or programme. That is not good enough, because we go on about disconnection and a lack of faith or belief in what the EU can offer, but if we are to re-engage with the public we need to talk more positively about the projects that have delivered on the ground. I very much hope that the Minister will not just defend the UK Government's negotiating position in Decemberwe will hear that anywaybut explain what much of the funding can do on the ground. I hope that in the months ahead there is action from the Scottish Executive and Ministers from both parties, who should live up to their rhetoric about what is vital for communities the length and breadth of Scotland.

Theresa Villiers: We should all be grateful to the European Standing Committee for forcing the Government to put this enormously important issue on the agenda this evening.
	We have heard a number of thoughtful and informed contributions to the debate. We began with the hon. Member for Leicester, East (Keith Vaz), who thought the budget was a good deal. As if to prove that he lives in a sunnier and happier world than the rest of us, he also thought that Europe was making progress on the Lisbon agenda. The hon. Member for Twickenham (Dr. Cable) sounded a note of reality. He criticised the Government's sell-out on the common agricultural policy in 2002. I agree that that concession hobbledthe Government's negotiating position in the 2005 negotiations, to devastating effect.
	The hon. Member for Luton, North (Kelvin Hopkins) told us that he believed the EU budget was a running sore and called for the repatriation of aid policy, agriculture and fisheries from the European Union. My hon. Friend the Member for Stone (Mr. Cash) spoke with huge insight on the issue on which he has spent so many years campaigning. In particular, he challenged Labour Members to vote against the Bill needed to put the new budget into effect. The hon. Member for Moray (Angus Robertson), as we have just heard, protested at what he saw as flawed assumptions which have overstated Scotland's income, with the resulting impact on its entitlement to regional funding. He launched a devastating attack on the record of the Liberal and Labour coalition in the Scottish Executive and its record on regional funding.
	The House heard about the history of the Prime Minister's spectacular sell-out on the British rebate. In 1999, he told  The Independent that the rebate was non-negotiable. On 8 June 2005, he reassured the House in the clearest terms:
	The UK rebate will remain and we will not negotiate it away. Period. [ Official Report, 8 June 2005; Vol. 434, c. 1234.]
	Less than two weeks later, the rebate was merely
	an anomaly that has to go, but it has to go in the context of the other anomaly being changed away.
	Hence, it was up for negotiation, but only alongside fundamental reform of the CAP.
	Then we had Commission President Barroso saying:
	At the beginning, our British friends said that they would not accept any change
	that is, to the rebate
	without radical change of the CAP. Now, they're not saying that anymore.
	There was complete capitulation when the Prime Minister agreed to surrender 7.1 billion of the British rebate without a single change being made to the common agricultural policy.

John Redwood: I am grateful to my hon. Friend, who is making a strong case. Is there not more fraud than there was British rebate, and should not the Prime Minister have been tackling the fraud, not giving away British money?

Theresa Villiers: I assure my right hon. Friend that I shall come to that in due course. I have great sympathy with his observation.
	The Prime Minister's capitulation was not the last cave-in. The European Parliament added another 2.68 billion to the budget in April. More recently, Budget Commissioner Dalia Grybauskaitė said that EU leaders understated the budget and that the true level over seven years is in excess of 600 billion.
	The Prime Minister has failed to prevent a huge expansion in the EU budget, failed to ensure that others pay their fair shareFrance will still pay 20 per cent. less than Britainand failed to defend the rebate negotiated with such stalwart courage and determination by Margaret Thatcher over 20 years ago.
	Remember that we are not talking about small numbers. The 7.1 billion extra that we will be paying as a result of the rebate sell-out could have wiped out NHS deficits for a start, with several billion left over. It could have paid for thousands of new nurses in our hospitals, teachers in our schools or police officers on our crime-ridden streets. Giving up that money is a betrayal of hard-working families already struggling with the heavy burden of the Chancellor's stealth taxes. Giving it up without reform of the common agricultural policy is a tragic lost opportunitya lost opportunity to remedy an injustice that keeps thousands in Africa struggling with abject and unnecessary poverty.
	The CAP, as we heard this evening, is bad for consumers, bad for the environment and bad for the developing world. The 2004 Red Book states:
	The poorest, who spend the greatest proportion of their income on food, are hit hardest by an implicit tax on food of around 26 per cent. Even after the benefits for farmers are taken into account, the cost to the UK economy has been estimated at some 0.5 per cent. of GDP.
	The consumer association,  Which?, has calculated that the CAP inflicts throughout the EU some of the highest costs for food in the world, adding 1,000 to the average family's annual food bill. And the opportunity cost could be even higher: a report by Oxford Economic Forecasting concluded that redeploying CAP funds to better uses, such as research and development, could boost growth by around 1 per cent. of GDP.
	The CAP is a pernicious tax on food that hits the poorest hardest. It hits the poor in Britain and the poor in the developing world, more than half of whom depend on farming to survive. The Institute of Economic Affairs estimates that EU agriculture policies reduce food exports from Africa by roughly 50 per cent. The World Bank has concluded that removing barriers to agricultural trade would benefit developing countries by $54 billion.
	I am sure we all remember the day last year when thousands of our constituents came to see us to seek our help in making poverty history, including campaigners such as Sheila Gallagher, James Catterson and Marie Pearce from my constituency. On that day, it was no surprise that many carried banners stating Axe the CAP, because the unreformed CAP is the single biggest obstacle to trade justice. I think that we were all stunned by the sheer volume of commitment, passion and energy that we witnessed that day, but it was to no avail when the Prime Minister actually came to make the decisions that really mattered at the EU summit in December.
	Despite their warm words, the Prime Minister and the Chancellor have manifestly failed to deliver CAP reform trade justice. As Neil O'Brien, director of the think tank Open Europe, put it:
	Over the summer, at Live8 and Gleneagles, there were huge demonstrations of public opposition to unfair trade barriers against developing countries. But for all the difference this has made in Brussels, it might as well never have happened. Trade policy is a good example of how the EU gets away with murder...But gradually people are waking up to what the EU is doing in our name. And they should be angry.
	It should make people even angrier that neither the Prime Minister nor his Chancellor has done anything to ensure that the extra billions that we will be paying to Brussels are spent wisely. As my hon. Friend the Member for Shipley (Philip Davies) has pointed out repeatedly, why should we give yet more money to an institution whose accounts have not been signed off by its auditors for 11 years? If the Commission cannot manage its existing multi-billion pound budget, why should we trust it with yet more of the British people's hard-earned money?
	It has become something of an annual ritual for the Court of Auditors to refuse to give a positive statement of assurance about the European Commission's accounts, but we should not let familiarity desensitise us to the seriousness of the problem. If the treasurer of a Barnet gardening club turned up at its annual general meeting to say, I can account for maybe a third of last year's budget, but as for the rest of the money, it could have been lost or stolenI'm not really sure which, it would rightly cause outrage, yet that happens every year in Brussels. If accounts are qualified in the business sector, confidence in a company collapses overnight, in which case the management finds itself out on its ear in double quick time. Furthermore, failure to get one's accounts right in the private sector can see directors facing jail terms, yet that happens every year in Brussels. However, the Prime Minister does not seem to have mentioned that unacceptable state of affairs as he blithely handed over billions of pounds more of our money to the European Union.
	Back in 1999, when the Santer Commission resigned in disgrace, the Prime Minister promised this House root and branch reform. His promises on tackling EU fraud and waste have proved as hollow as his promises on the rebate and on CAP reform. Nearly a decade later, it is still business as usual in Brussels. Nothing has changed since the investigating committee that brought down Mr. Santer's Commission reported:
	It is becoming particularly difficult to find anyone who has even the slightest sense of responsibility.
	Year in, year out, the Chancellor votes in ECOFIN to discharge the Commission's accounts without protest, and Labour MEPs vote those accounts through in the European Parliament.
	Every effort is made to silence those who are brave enough to speak out against that complacency. When Marta Andreasen arrived as the Commission's chief accountant, she was horrified by what she found. The Commission's computer systems meant that the large amounts of money could be transferred without leaving any electronic fingerprint. In her words, the accounting systems left
	an open till waiting to be robbed.
	The Commission was not even using double entry bookkeeping, which has been in widespread use throughout Europe since the Venetians invented it more than seven centuries ago. It is a basic tool used by businesses ranging from the largest multinational to the smallest corner shop.
	When Marta Andreasen expressed her concerns to her boss, she was ignored by the person whom the Prime Minister put in charge of achieving the root and branch reform that he had promised. That person was, of course, Neil Kinnock. And when she spoke out publicly, it was Neil Kinnock, who once famously castigated Militant for scuttling round delivering redundancy notices by taxi, who had Andreasen stopped by security officials at Brussels airport and served with a fax threatening her with the sack if she did not keep quiet.

Keith Vaz: Let me take the hon. Lady away fromNeil Kinnock to the subject of the debate, which is the budget. I thought that she supported the enlargement of the European Union. If she listened to the opening speech by my right hon. Friend the Minister for Europe and to the rest of the debate, she will know that the deal was agreed to fulfil our responsibilities on enlargement. Why does not she deal with that point?

Theresa Villiers: I can do so by saying that enlargement should have been funded by radical reform of the common agricultural policy.
	Other whistleblowers have received the same shabby treatment as Marta Andreasen. When her colleague, Mr. Jules Muis, spoke our about the chronically sordid state of the EU's accounts, he was told by a Commission official: We have ways of breaking people like you. By contrast, no action whatever was taken against the people in charge of Eurostat, where more than 3 million went missing, squandered on staff perks including a riding club and a volleyball team and siphoned off into front companies producing bogus research. They were simply shuffled sideways and continue to this day to collect big salaries or fat pensions. Despite a report from the Commission that admitted that there was a vast enterprise of looting at the EU's statistics agency, the only person who was raided by the police over Eurostat was the journalist investigating the scandal.
	I urge the House to vote against the motion, because when the Prime Minister agreed the new EU budget in the early hours of Saturday 17 December last year, he betrayed the British taxpayer, betrayed the British consumer, and betrayed millions of the poorest people on the planet.

John Healey: This has been a wide-ranging debatein some cases rather wider than the motion. I pay tribute to the European Scrutiny Committee and the work that it does to help both Houses to follow more closely proceedings, operations and arrangements in the European Union. It has played an important part in providing the background to this debate and will play an important role as we seek to put in place the arrangements for the future.
	Today's debate is an important step in the process of agreeing the new EU budget. Following it, the Government will complete negotiations with other member states on the inter-institutional agreement and the own resources decision. The House will have scope for a further full debate when the Government introduce primary legislation to ratify the own resources decision.

William Cash: When?

John Healey: The hon. Gentleman asked that question in his speech, and I will deal with it right now. Ratification of the own resources decision is required by December 2008, and we expect to be able to introduce primary legislation in this House at the beginning of the 2007 Session.
	Let me turn to several of the matters that hon. Members raised. The hon. Member for Altrincham and Sale, West (Mr. Brady) and I served together on the Education and Employment Committee when we were both first elected to this House. I recall that he was then rather careful in the arguments that he made and the facts that he used, but his speech today was littered with mistakes, wrong assertions and wrong figures. He is wrong to say that we surrendered the rebate, wrong to say that we gained nothing in returnin the agreement, and wrong about the agreementitself. Far from our showingin his wordsutter incompetence, that agreement was believed by many to be difficult, if not impossible, to achieve. Under the UK presidency we brokered that agreement, which gives the European Union its budget for the future seven-year financial perspective period.

Graham Brady: Will the Financial Secretary simply and straightforwardly admit that the Government have given up more than 7 billion of British taxpayers' money by conceding part of the rebate?

John Healey: No. I am about to deal with some of the wrong figures that the hon. Gentleman used. He made a dodgy start by using a briefing from the Open Europe group. The CAP will not, as he asserted, be between 40 and 44 per cent., but 34 per cent. of the total. He included the 9 to 10 per cent. of the budget that is spent on rural development and used for environmental and other benefits in rural areas, not farmers' subsidies.
	The hon. Gentleman is wrong to say that the Treasury has changed the way in which we calculate payments. In the Budget and the Treasury White Paper on EU finances, we calculate EU payments in exactly the same way as has always been done. He said that the budget was increasingbut it is now for an EU of 25 not 15 countries. In the next financial perspective to 2013, the EU budget will fall to less than 1 per cent. of gross national income in the EUthe lowest level for 20 years.
	The hon. Member for Chipping Barnet (Mrs. Villiers) spent most of her contribution conflating and inflating the popular myths about fraud in the EU. In 2004, fraud in the EU budget was 130 million. That is 0.1 per cent. Fraud accounts for 0.02 per cent. of the CAP budget and 0.4 per cent. of the budget for structural funds. The UK has been determined that EU funds should be properly and efficiently spent. The EU anti-fraud office has been heavily promoted and the UK was instrumental in setting it up. The UK strongly supported setting up the Commission's internal audit unit on an independent basis. The hon. Lady speaks with experience, so I am sure that she agrees that few countries in the EU have championed the cause of bearing down on fraud more strongly than the UK.

Theresa Villiers: Will the Financial Secretary guarantee that next time the Commission's accounts appear before ECOFIN for discharge, the British Government will vote against them?

John Healey: The hon. Lady confuses questions about fraud with those about reliability. Our consideration of accounts at ECOFIN will depend on those in the future.
	The hon. Member for Twickenham (Dr. Cable), who spoke for the Liberal Democrats but is no longer present, conceded that enlargement had been successful in southern Europe and was increasingly perceived as a success in eastern European. He and the hon. Member for Chipping Barnet were critical of the CAP. However, let me stress to them both that the CAP is being reformed. Under the UK presidency, we were able to put in place the historic liberalising reform of the UK sugar regime. The total value of the CAP will decrease over the new financial perspective, falling to 51 billion a year by 2013. The fundamental reviewpart of the December agreement and the inter-institutional agreementwill give us the chance to press further towards long-term reform and a vision for the CAP, which sees European farming as capable of being competitive without the need for subsidy or protectionism.
	My hon. Friend the Member for Leicester, East (Keith Vaz) was in something of a minority. However, he put the case clearly and cogently for a forward-looking Europe. He reminded hon. Members that commitment to enlargement has been fundamental to the UK Government's approach, not only under the current Administration but under the previous one. He also reminded hon. Members that the UK Government have been one of the strongest supporters of EU enlargement and one of its most forceful advocates. He also stressed the importance of the EU's responsibility in helping the new member states undertake the economic development that they require.
	My hon. Friend the Member for Caerphilly(Mr. David) spoke about the responsibility of our mature democracies to help what he called the fragile democracies in eastern Europe. He is right to say that the Government should do that, and we are doing it. We are proud of that commitment.

John Redwood: Will the Minister give way?

John Healey: I will not give way to the right hon. Gentleman. He has not been here during the debate, and I am not prepared to take as absurd an intervention from him as the one he made on the hon. Member for Chipping Barnet.
	The hon. Member for Moray (Angus Robertson) said that the UK should pay its fair share for the enlargement of the EU, but he was concerned about the transitional arrangements. The Scottish Highlands and Islands have done very well out of the agreement that was made in 1999, and out of the present financial perspective, and they will continue to benefit from the convergence funding agreed for the next financial perspective. Furthermore, the regional development funding in the UK will largely continue to be sourced directly from the UK Government, not from the European Union.
	My hon. Friend the Member for Luton, North (Kelvin Hopkins) and the hon. Member for Stone(Mr. Cash) made speeches rather different from those of my hon. Friends the Members for Leicester, East and for Caerphilly. They both made rather wide-ranging speechesindeed, they sometimes ranged rather wide of the motion that we are debatingand there was a degree of common ground between them.
	The hon. Member for Stone repeatedly accused the Government of misrepresenting the budget figures. He did so in an intervention on my right hon. Friend the Minister for Europe, and again in his speech. In each case, he cited the Budget Commissioner. My right hon. Friend the Minister made it very clear that the Commissioner's figures on the total budget included counting programmes that are not part of the way in which the European Union calculates its budget. Although she is the Budget Commissioner, Mrs. Grybauskaite's figures are, sadly, incorrect. No other member state, or the Commission, at any time during the financial negotiations assessed the budget in the way that she now pretends to do.

William Cash: The Minister has just been praising the financial investigation team known as OLAF, but will he note that although 9,400 cases of fraud were reported in 2004 there has been not one successful conviction of any major wrongdoer, and that no funds have been recovered in the seven years of OLAF's existence? Is that a success, in the Minister's terms?

John Healey: The questions that the hon. Gentleman raises are questions for OLAF. Surely he would not contest that we need such a body at the heart of the European Union. We also need the independent internal audit unit that the Commissioner has set up.
	The inter-institutional agreement and the own resources decisions are the final parts of what has been a long difficult negotiation on the financial perspective. As the first negotiation of a union of 25 member states, it was bound to be complex. It is, however, a unique opportunity to modernise the budget and set out a process that will lead to a budget more fit for purpose for the European Union of the 21st century.
	In the first place, the agreement ensures budget discipline. Rejecting the Commission's proposal for a budget of 1,025 billion, member states have instead agreed a budget of 864 billion, or 1.048 per cent. of EU gross national income. By 2013, the starting point for future negotiations, the budget will be about 1 per cent. of EU gross national incomeits lowest level for 20 years.
	The budget also allows for an historic shift in spending from the old member states of the Union to the new central and eastern European member states. It supports our long-argued UK commitment to EU enlargement. Over the coming years, the funds forthe new member states will increase from less than30 billion to more than 170 billiona sevenfold increase. These funds aid their economic development, and they will not only make them more prosperous and more stable, but bring significant benefits to the UK too. UK exports to the eight eastern European new member states totalled in 2004 5.3 billionup by around 230 per cent. over those of the previous decade. Access to these new and growing markets will benefit UK consumers and UK business.
	The historic enlargement of the EU, combined with the intensifying global challenges on the economy, poverty, the environment and security, meant that the financing of the EU could no longer be viewed in the manner that it had been prior to 2004. As the Prime Minister said, as the EU's strongest supporter of enlargement, it was fair and right that the UK contributed properly to the costs of enlargement.
	We have consistently argued, however, and carried out the argument in the negotiations, that the UK abatement remains justified because of the inequalities and inefficiencies on the expenditure side of the budget. The December Council conclusions that were agreed say:
	The UK budgetary correction mechanism (the 'UK abatement') shall remain.
	The UK abatement remains, the abatement mechanism remains unchanged and the deal in December means that the UK will continue to receive the abatement in full on all EU spending in the old member states and on agricultural spending in the new member states, but we will forgo the increase in the abatement resulting from the economic development spending in the new member states and therefore will no longer receive an abatement on spending that contributes to the growth and the prosperity of Europe's poorest countries. As a result of those changes, the UK's net contribution will, for the first time, be similar to that of France and that of Italymember states that are comparable to the UK in size and prosperity.

John Redwood: Will the Financial Secretary give way?

John Healey: I think that I have made my position clear to the right hon. Gentleman.
	As a result of these changes, the total UK rebate will still be larger over the next financial perspective than the current onean estimated 41 billion in 2004 prices between 2007 and 2013 compared with36 billion in the current financial perspective.
	Finally, there will be the review of the budget. The review was agreed as part of the December package and confirmed in the inter-institutional agreement. The review will be led by the Commission and will report in 2008-09. It will allow the Council then to assess the value of all areas of EU expenditure, including the common agricultural policy. This is a process through which we can move to further reform of the CAP and further reform of the European budget as a whole to put it on a more rational and logical basis, so that it can concentrate on the things that are essential to Europe's future.
	Throughout this process of negotiation, the UK's objectives have been consistent. We wanted tight budgetary discipline; we wanted more spending on policy reform, especially more reform to the CAP and the structural funds; we wanted successful enlargement; and we also wanted to protect the UK's financial position. We secured budget growth limited to 13 per cent., when the Commission had proposed 25 per cent. We secured an EU budget that will be less than 1 per cent. of gross national income by 2013its lowest level for 20 years. We secured a massive uplift in social and cohesion fund allocations for the new member states, and secured more flexibility to ensure that those countries can effectively absorb the structural funds and improve their growth and productivity. We secured a doubling in research and development spending, and secured and retained the UK abatement, which will increase in value during the next financial perspective. We secured the political commitment of all member states and the Commission to a fundamental review of all aspects of expenditure and revenue.
	This is good deal for Europe, and it is a good deal for the UK. I commend it to the House.

Question put:
	 The House divided: Ayes 245, Noes 194.

Question accordingly agreed to.
	 Resolved,
	That this House takes note of European Union Documents No. 5973/06, the Commission's revised Proposal for renewal of the Inter-institutional Agreement on budgetary discipline and improvement of the budgetary procedure, No. 6426/06, the Commission Contribution to the Inter-institutional Negotiations on the Proposal for renewal of the Inter-institutional Agreement on budgetary discipline and improvement of the budgetary procedure, and No. 7421/1/06, Draft Decision on the system of the European Communities' own resources (//EC, Euratom); and supports the Government's objective of securing agreement on the Inter-institutional Agreement for the 2007-13 Financial Perspective and the Own Resources Decision in line with the agreement reached by Heads of Government at the December European Council.

PRESS REGULATION

Motion made, and Question proposed, That this House do now adjourn. [Mr. Heppell.]

George Galloway: This will not be a rant about the venality of the prevailing orthodoxy in the British media. Everyone is currently recalling the words of Enoch Powell, who said that all political careers end in failure.  [Interruption.] Actually, mine is going quite well, judging by last Thursday's election results. I advise Labour Members to pipe down on that particular subject; otherwise I shall talk to them about how we ripped apart the corrupt Labour administration in Tower Hamlets, defeating the leader, deputy leader, housing convenor, mayor, deputy mayorI could go on, Mr. Speaker, but you would not allow me to do so.
	I am thinking of another of Mr. Powell's remarks, however: that a politician complaining about the press is like a ship's captain complaining about the sea. In any case, I have my own access to the media, having worked for nearly nine years for Associated Newspapers and for the last 16 weeks as host of a radio talk show on Saturday and Sunday nights.
	It is not the grim and unremitting orthodoxy of the press about which I am concerned this evening, but the slip over the cusp of criminality into which some newspapers have lapsed. As long ago as 5 June 1999, I raised in this House the issue of the agent provocateur behaviour of Mazher Mahmood, otherwise known as the fake sheikh. I warned then that Mr. Murdoch's flagship reporter was not so much involved in unmasking wrongdoing as in dreaming up acts of wrongdoing and setting up individuals to commit them. I should have known that one day, he wouldtry this on me. The expensive though abstemious Dorchester dinner that he threw for me in March of this year was intended to entrap me in a foreign funding scam in advance of the local elections in which my party, Respect, as I have just had the opportunity to say, did rather well. When I rebuffed this crude attempt to suborn me, Mr. Murdoch's finest tried to entice me down the poisonous path of anti-Semitism and holocaust denial.
	Nearly as reprehensible were the arguments later adduced by counsel for Mahmood, paid for by Murdoch, in its vain attempt to prevent me from publishing pictures of the fake sheikh, which can now be found on the Respect coalition website and in other places. Its argument that this was an invasion of Mahmood's privacy, and that pictures of him taken for one purpose should not be used for anotherfor publication in a national newspaperwould of course put  The News of the World out of business. In the words of Justice Mitting, who heard the case:
	I'm surprised that that argument is being advanced from your corner.
	The point is that Mahmood's behaviour toward me and many others whom he did manage to deceive is not only reprehensible but surely illegal, as ProfessorRoy Greenslade has argued in several recent articles. I should be interested to hear the Government's view on this, and to hear of any plans that they have to tackle this abuse of press freedom.
	The House will know that I have spent much of the past three years successfully dealing with false and defamatory allegations published about me in a variety of American and British newspapers. These newspapers have now had to pay out some 2 million in damages and costs to me and my lawyers as a result of those libels. That a crime was committed against me in Baghdad by forgers constructing fake incriminating materials cannot be gainsaid.  The Christian Science Monitor published on its front page a story that I had received more than $10 million in regular payments from a son of Saddam Hussein whom I never met, beginning a year before I had ever visited Iraq, and ending some months after I left Iraq for the last time. Those documents, which contained forgeries of my signature and elaborate attempts at a chronology matching my actual visits to Iraq, were brought by  The Christian Science Monitor from an Iraqi general whom it named and photographed within days of the fall of Baghdad to the invading forces.
	After I began legal proceedings against  The Christian Science Monitor, and after  The Mail on Sunday had bought another set of documents from the same Iraqi general, purporting to show my receipt of a different $10 million from a different son of Saddam Hussein,  The Christian Science Monitor sent its documents to leading American universities for forensic examination. It was a precaution that it ought to have takenbefore publication, rather than afterward, because the documents were swiftly exposed as forgeries, as were the documents bought by  The Mail on Sunday from the same source in the same week.
	When both newspapers unmasked the forgeries they had bought, I called on our Government to cause our officials in Baghdad to visit that Iraqi general and ask him why he was circulating forged materials about a British Member of Parliament. There was only silence from the Government and the Iraqi general remains unvisited by any of our embassy personnel. You may wonder, Mr. Speaker, why the Government would not be keen to get to the bottom of such a conspiracy or perhaps, like me, you already know the reason why.
	When the Telegraph Group cornered the market over several weeks in April and May 2003 in documents apparently exhumed from a burning building in Baghdad, many smelled a similar species of rat. Documents incriminating Russia and France and, more importantly, documents appearing to link the former Iraqi regime with Osama bin Laden personally were all scoops missed by every other media outlet, but not by  The Daily Telegraph. In that burning building were allegedly found, of course, the documents about me for which it was condemned in the libel courts and caned by Mr. Justice Eady, who said that the paper had rushed to publish the documents, and had adopted them and editorialised upon them with relish.
	I can reveal this evening for the first time that the  Telegraph journalist, Mr. David Blairan unfortunate coincidence of nameand at least one of his superiors in London lied in the High Court during my libel action. Their claim that Mr. Blair was not led to those documents but had merely chanced upon them while wandering around a looted and burning building, and that he had found all of the documents published by the  Telegraph in the same place, at the same time and in the same box, is quite simply a lie.
	On 18 July 2003 a very senior British journalist, a foreign correspondent on a national daily, with impeccable credentials and with no conceivable reason to lie, visited me in the House of Commons in my office in Portcullis House. He had been seeking that meeting with me for several weeks. What he told me is perhaps best described by a paraphrasing of the email I sent my lawyer at exactly 13.41 that day, just minutes after that senior British journalist left my office. I told my lawyer that on the weekend David Blair found the documents he was supposed to travel with my contact to the south of Iraq, but pulled out at the hotel door at the last minute and without explanation. He had a conversation with my contact on the day the first  Telegraph story was published. He insisted that he had found the documents, though he said that he was uneasy about their veracity. My contact says that Blair was very anxious and nervous about the scale of the treatment of the story by  The Daily Telegraph and its clear assumption of guilt.
	On the day of the follow-up piece, Mr. Blair and my contact spoke again. This time, Mr. Blair confessed that the second set of documents, published by the  Telegraph had in fact been given to him and that he had not, as he had claimed, found them. He said to my contact that he was not able to say who gave them to him. He said that he had been told by London to continue to insist that he found those documents, and that my contact must never divulge the true story.
	After they both left Iraq, David Blair telephoned my contact to ask if anyone else knew about the true provenance of the documents. Well now we all know.
	My contact told me further that Philip Sherwell of  The Sunday Telegraph said that he had himself trawled the same room in the same building and that everything was fire or sprinkler-damaged beyond repair. On Sherwell's prior visit, the box Blair later claimed to have found was not there.
	Of course, the fact that the second set of  Telegraph documents was not found, as the paper falsely claimed, but was given to Mr. Blair by somebody does not necessarily mean that the first set of documents was not found in the building. But the fact that the paper lied under oath about the provenance of the second set of documents must reasonably suggest either that both sets of documents were given to the  Telegraph's reporter or, at the very least, that the  Telegraph was led to the first by the person or persons who provided the second. I am not unmindful of the gravity of what I am saying, Mr. Speaker. If my foreign correspondent visitor is right, a criminal conspiracy was hatched and executed between Baghdad and London against me.
	The  Telegraph's then proprietor was, of course, a foreign billionaire, Lord Conrad Black. The noble lord was nothing if not ideologically engaged. According to Philippe Sands QC in his recent book, Lawless World, the British Prime Minister told the American Government of George W. Bush that Black was very helpfully using the influence of his papers to make the case for the war. Mazher Mahmood's employer, too, is a foreign billionaire, although unlike Lord Black there is no evidence that he is also a thief, but that must pose the question of how content we are to allow that massive concentration of media ownership in the hands of foreign billionaires with an ideological crusade in their hearts and an axe to grind.
	The Government's attitude has been one of collusion withsome would say obeisance tothose foreign owners. The Government no doubt hoped that that would ensure them a different fate to that suffered by previous Labour Administrations at the hands of the newspaper barons. If so, they must know differently now.
	What is to be done? Should we allow 40 per cent. of newspaper circulation in Britain to be in Rupert Murdoch's grubby handsfrom the streetwalkers of the  News of the World to the higher class of courtesan at  The Times? Will we allow our local press to be subject, as it is through takeover, to increasing monopolisation?
	For almost 20 years in the House I have opposed state regulation of the press, and I oppose it still. I believe that freedom and democracy in this country would lose more than they would gain from such regulation, but part of the answer to those questions lies in the Government's hands: first, through modifying their relations with those media magnates and, secondly, through caps on media ownership, especially ownership by foreign billionaires whose loyalty is certainly not to this country.

Richard Caborn: First, I congratulate the hon. Member for Bethnal Green and Bow (Mr. Galloway) on securing the debate. He has risen to the usual expectations. This is not the first time that we have debated press regulation and I am sure that it will not be the last.
	I want to start by registering the fact that the Government strongly support self-regulation of the press. Indeed, I think that the hon. Gentleman acknowledged that, too. We believe that a press free from state intervention is fundamental to democracy. The history of a free press in this country dates back to 1695 when Parliament decided against renewing the Act that, earlier in the century, had suppressed all newspapers except official publications. These days, we cannot, and indeed do not, expect to like or agree with everything that is printed.
	We in government would occasionallyas the hon. Gentleman was sayinglike the media to appear to understand us and, indeed, sometimes even probably agree with us. However, we believe that the Government should not seek to intervene in any way in what a newspaper or magazine chooses to publish. We therefore support self-regulation, and the basis for the Government's relationship with the independent Press Complaints Commission is support for effective self-regulation.
	Newspapers may not publish just what they like. Indeed, like all of us, they must abide by the law. That includes, for example, the laws on defamatory material. We acknowledge that with freedom comes responsibility, and in recognition of their responsibilities, newspapers choose to restrict their historic right to free speechnow guaranteed by the Human Rights Act 1998by signing up to the voluntary code of practice overseen by the PCC. In fact, consequently, newspapers already work under tighter regulations than the rest of us.
	It is important to put in context what the hon. Gentleman has been saying and to note the context in which the debate takes place. There are 107 daily and 501 weekly newspapers and 8,330 magazines. Every week, as a nation, we get through more than 150 million newspapers. Against that background, the PCC received 3,654 complaints in 2005very similar to the numbers received in the previous two years, which were 3,618 in 2004 and 3,649 the year before.
	The simple rehearsal of the total number of complaints inevitably conceals a more complex picture. The PCC receives many complaints that do not fall within its remit relating, for example, to advertising, legal matters or issues of taste and decencyor that represent general concerns on the part of complainants that do not fall within the terms of the code. In those cases, the PCC seeks to assist complainants as best it can, by referring them to other relevant bodies, or passing on their views to the editor concerned.
	In all, the commission had to make 900 rulings under the code in 2004, which represented a drop of about 14 per cent. from 2003. The complaints that raised a possible breach of the code also fell by 7 per cent. Therefore, despite overall complaint levels remaining the same, there appears to have been a noticeable drop in substantive concerns about the newspaper and magazine industry.
	One area of particular concern to the hon. Gentleman is misrepresentation, which he outlined this evening. The code contains a clause on the use of clandestine devices and subterfuge, and it is worth rehearsing its contents:
	The press must not seek to obtain or publish material acquired by using hidden cameras or clandestine listening devices; or by intercepting private or mobile telephone calls, messages or emails; or by the unauthorised removal of documents or photographs. Engaging in misrepresentation or subterfuge can generally be justified only in the public interest and then only when the material cannot be obtained by other means.
	However, that clause has a public interest exemption, meaning that clandestine devices or subterfuge can be permissible if editors demonstrate that their use is in the public interest. The public interest is defined by the PCC as
	Detecting or exposing crime or serious impropriety; protecting public health and safety; preventing the public from being misled by an action or statement of an individual or organisation.
	We believe that the important point is that, if a journalist obtains a story or information by misrepresentation or subterfuge and an editor uses that story, he must satisfy himself that it is in the public interest, as he will be only too aware that he is likely to have to demonstrate that to the PCC or risk public censure.
	Investigative journalists have, in that way, uncovered a great deal of crime and impropriety, but I certainly understand the anger and concern of those who find themselves on the receiving end of that sort of behaviour and who committed no crime or impropriety. However, that is part of the price that we pay for our independent press. I should also point out that complaints about the use of clandestine devices and subterfuge made up only 0.6 per cent. of complaints to the PCC last yearjust over 20 cases. So, it is fair to say that the problem is not widespread. I do not know whether the hon. Gentleman referred his complaint to the PCC.

George Galloway: I am grateful to my right hon. Friend, the last of the Mohicans on the Labour Front Bench, for giving way. The reality is that the reason so few people complain to the PCC is that it is not worth a pot of warm water. It has absolutely no effect on the gutter press of Rupert Murdoch and the  News of the World. They laugh at it. That is why I did not take my complaint to the PCC. I preferred to bring it to my right hon. Friend's attention in the hope that he might do something more about it than he seems to be suggesting.

Richard Caborn: As my hon. Friend said a little earlier to the House, he has been successful in his prosecutions, because he is now 2 million better off. It looks as though the recourse that he has taken, either through the PCC or the courts, has been quite successful. By his own admission, he has been quite successful in bringing those concerned to book in one form or another, through the courts of the land or the PCC. He has informed the House that he and his lawyers have received about2 million in the recent past. By that token, there has been some success in addressing that complaint.

George Galloway: I had to risk absolute and total ruinto do so. I would either have been 2 million up or2 million down. Most people cannot risk doing that and do not have families that permit them to do that. That is why we need something a bit stronger than what my right hon. Friend has to say this evening.

Richard Caborn: My hon. Friend is not what I would call the normal family. He is slightly different and slightly more of a personality. Just occasionally, he attracts a little interest from the pressI do not know whether he goes out to do so, but he might from time to time. It is stretching the imagination just a little to say that he is one of the ordinary citizens of this country. By his own admission, at least he has been able to use the courts of this land to bring his case, which has been found in his favour.
	I do not wish to diminish the importance of such complaints, but it is important that we keep a sense of perspective. Considering the vast number of publications, the articles that they contain and the copies distributed, the number of complaints about any clause in the PCC's code is very small, and this area is one of the smallest. Complaints about accuracy continue to provide the commission with the bulk of its workmore than50 per cent. of the letters that it receives are about accuracy.
	The PCC continues to monitor customer satisfaction by asking all complainants for their views on whether they are satisfied with how their complaints were handled. In 2004, 305 complainants returned the anonymous feedback form. The results were as follows: 94 per cent. of people whose complaints were either upheld or resolved were satisfied or very satisfied with the way in which their case had been handled; 79 per cent. of respondents considered the time taken to deal with their complaint had been about right; 94 per cent. of the complainants found the commission's literature to be clear or very clear; 87 per cent. found the PCC staff to be helpful or very helpful; and 60 per cent. overall concluded that their complaints had been handled satisfactorily or very satisfactorily. That was in line with the previous years and included those cases where the commission found no breach of the code and one might expect some hostility to the PCC.
	I am not suggesting that there is no room for improvement, because there certainly is and neither do I believe that there is any room for complacency. I have great sympathy for those who suddenly find themselves thrust into the media spotlight, particularly if it is not their choice. I acknowledge what the hon. Gentleman is saying. He has the opportunity to come here tonight and present his case. There are members of the general public who, when they find themselves in such circumstances, have great difficulty in finding a platform from which to raise such matters.
	I do not accept wholly what the hon. Gentleman says about the PCC. As I tried to indicate, those who have used it find that the organisation is reasonably satisfactory in dealing with their complaints. However, as I said, the matter needs to be kept under review and vigilance is important. I believe that what we have in place to protect the freedom of the press on the one handI think that the hon. Gentleman agrees with thatand to give recourse when there has been transgression from the code is about right. However, that is not to say that we do not keep the situation under constant reviewwe do. I hope that that is satisfactory to the House.
	 Question put and agreed to.
	 Adjourned accordingly at ten minutes past Eleven o'clock.